Clarksons Research have released a review of the global shipbuilding market in 2003. Summarising the review, Steve Gordon, Managing Director of Clarksons Research, commented:

“2023 was a year of recovering output, increasing prices and a good flow of orders for the global shipbuilding industry. On a regional level, China produced 50% of yard output and also dominated ordering, while alternative fuels moved to nearly 50% of orderbook tonnage. And while the 2024 delivery profile is dominated by container and gas, the product mix of new orders tilted towards tankers and bulkers. Key data points include :

• Global shipyard output increased 10% y-o-y to 35m CGT in 2023, with China delivering 50% of output by CGT for the first time (South Korea delivered 26%, Japan 14%).
• China market share leader in bulkers, tankers and containers, South Korea lead in LNG.
• Good flow of new orders reported with excess 41.7m CGT of $115bn reported (down in CGT and value, up in DWT and GT).

Orderbook up only 4% y-o-y to 124m CGT with an aggregate value of $367bn, 50% of the orderbook by tonnage now alternative fuelled, forward yard cover at a strong ~3.5 years
Further declines in number of active yards (building above 20,000 dwt), shipyard capacity down ~35% on peak production.

Underlying fleet renewal requirements remain as fleet ages and emissions regulation accelerates.

Newbuild prices up 10% across 2023, within 7% of peak 2008 pricing but 35% down on an inflationary adjusted basis.

Greek shipping companies committed 60% more newbuild investment y-o-y ($18bn and also the highest Greek investment by dwt since 2013) and, for the first time since 2018, European owners committed more investment than Asian.”

Product Mix: More Tankers

There was generally a good flow of orders in 2023 (down in CGT and value, up in DWT and GT) with an increase in tanker orders (+222% by dwt, albeit from a low base) and bulkers (+12% by dwt).

Although containership ordering fell by 43% in TEU, this still represents historically high volumes, supported by liner companies continuing to invest in green fleet renewal programs (83% of capacity ordered was alternative fuelled). It was a record year for car carrier orders (80 orders of $8.1bn, 79% alternative fuelled, rising to 98% including “ready” orders) and there were also good order volumes for gas (e.g. 68 VLGCs# and 66 LNG). There were also some good volumes (and with innovative alternative fuel / ESTs) in the smaller ship market (e.g. short sea / MPP, offshore wind, ferry) and, with the cruise market recovering, some big ship project discussions started. Reflecting the uptick in tanker orders, Greek investors committed 60% more newbuild investment (and their highest in dwt since 2013) and, for the first time since 2018, European owners committed more investment than Asian.

Fleet Renewal:

Going Green

Uncertainty around fuel choice and “grumbles” around pricing levels (they have reached their highest level since the 2008 peak, with our index now within 7% but still ~35% down on an inflationary adjusted basis) still remain. But with good cashflow across shipping (helped by further “disruption upside”) and underlying fleet renewal requirements building (the fleet is ageing, emissions regulation is accelerating and over 30% of tonnage is D or E rated under CII) we expect, for the moment, a good flow of new orders again in 2024* for our shipbuilding and marine equipment friends.
Source: Clarksons