Container Ships and LNG Tankers Are Dominating the Newbuilding Market

The main trend in the newbuilding market this year, has been following the same line as in 2021. This means that container ships and LNG tanker are the main ship types in demand. In its latest weekly report, shipbroker Intermodal said that “the newbuilding market activity since the start of the year is following the same momentum that we have been witnessing during 2021. Container and LNG units are having the lion’s share among the contracts, dry bulk newbuilding projects are present, yet with a volume seemingly incomparable to the Container ones, while tanker newbuilding activity is limited, with crude sector completely vanished from the newbuilding realm”.

“According to our preliminary data, a total of around eleven bulk carrier units, sixty-five Containers, twenty-two LNG, and six tanker units were ordered during the first two months of 2022. In terms of dwt capacity, bulker carriers’ volume is estimated at around 1,75 million dwt tons, while tanker units’ capacity consists of 3×50,000dwt MR2 vessels with the rest orders referring to small specialized tanker units. Container sector contracting capacity is summing a whopping number of around 480,000teu while LNG units referred to the 174,000cbm size. The vast majority of the above projects are characterized by eco-friendly technology adoptions, a trend that comes as no surprise amidst IMO decarbonization strategies. LNG retrofits are gaining the biggest market share while methanol fuelled propulsion has also made its appearance”, said Intermodal’s Research Analyst, Mr. Yiannis Parganas.

“As far as the newbuilding prices are concerned, levels have seen a sharp increase during the past months, while despite the recent signs of stabilization, the possibility of a downward trajectory is not likely to come in the short term. Steel price which accounts for around 30% of the total shipbuilding cost, is hovering at increased levels, fading the chance of any price newbuilding reduction. At the same time, even if demand for newbuilding projects slows down, at the time being a 2024 delivery is hard to be found. Most shipyards have already booked their berths until end-2024 and into 2025, while giant LNG and Container order books are already into effect in a variety of shipyards, moving delivery dates for new projects intra 2025”, Mr. Parganas noted.

“The story silver lining in the weak dry bulk and tanker newbuilding activity is depicted to the supply side of the respective units. The past two years, contracting activity have shaped a modest fleet expansion for both segments. The dry bulk sector will see an expansion of around 2.0% for 2022, with its orderbook standing at 7% of its total fleet. Along the same lines, the fleet expansion for the tanker sector is estimated at 2% for both crude and product tankers with a 7% orderbook to fleet ratio as well at the time being. More specifically, a 8% crude tanker orderbook per fleet ratio is projected with product tanker same rate being forecasted at the 5% mark”, Intermodal’s analyst concluded.

Nikos Roussanoglou, Hellenic Shipping News Worldwide