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International Cooperation Department
Tel.: (+86-21) 65853850-8034
Fax: (+86-21) 65373125
E-mail: ICDept@sisi-smu.org
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International Shipping |
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| 8 months, $135.4 billion, 1454 ships! |
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Date:2024-09-23 Readers:
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Clarkson statistics show that in the first eight months of this year, the global shipping companies have invested a total of up to $135.4 billion in the construction of 1,454 new ships, with a total deadweight tonnage of 106.4 million tonnes, an annual increase of 27%, which is more than double the average level of the past ten years and a record high.
In the current shipbuilding market, oil tankers, gas carriers and bulk carriers are still the main ship types in the order book, occupying a considerable market share and holding the top three positions. According to the latest data released by China Association of the Shipbuilding Industry (CASI), in the first half of 2024, the turnover structure of each type of ship in terms of deadweight tonnes (CGT) is, in order, oil tankers (29%), gas carriers (28%), bulk carriers (19%), container ships (10%), other ships (9%), and passenger ships (5%), among others.
Ship prices likewise reach an all-time peak
This past year has seen a period of unprecedented prosperity for the global shipbuilding industry. According to the latest figures, the Clarkson Newbuilding Price Index reached 189 points at the beginning of this month, up 16.5 per cent compared to the previous period. This increase puts the index less than 1 per cent away from its all-time high set in 2008.
Among the different types of vessels, tanker prices have risen particularly dramatically this year. Since the beginning of the year, the newbuilding price index for tankers has risen by 7 per cent, demonstrating the strong demand for tankers in the market. Among the various sub-categories of tankers, small tankers have seen the most prominent increase. MR tankers, on the other hand, have risen by 9 per cent since the beginning of the year, an increase that is particularly noteworthy among the ship categories.
Meanwhile, container ship prices, while relatively flat, are still showing some upward movement. Since January 2024, the newbuilding index for container ships has risen by 4 per cent.
In addition, the prices of dry bulk carriers are also showing a clear upward trend. Since January, the price of dry bulk carriers has risen by 6 per cent, with the price of large bulk carriers rising particularly significantly. This phenomenon suggests that the dry bulk carrier market is also experiencing a boom.
The current boom in the shipbuilding industry stems mainly from the fact that shipping companies are well-funded, coupled with an urgent need to renew and upgrade their green fleets. At the same time, shipbuilders' production capacity is unable to meet market demand, leading to a continuous rise in ship prices, further fuelling the shipbuilding boom.
Chinese Shipowners Leading the Way
This year, Chinese shipowners are leading the way in new ship investment, spending a total of $16.1 billion to build 248 ships, of which 28 per cent are gas carriers, 23 per cent are tankers, 23 per cent are bulk carriers and 18 per cent are container ships.
Not long ago, companies under China COSCO Shipping Group Company Limited (COSCO Shipping Group) announced a succession of major newbuilding programmes totalling 54 ships.
On 29 August 2024, Cosco Shipping Holdings Company Limited (COSCO Shipping Holdings), a subsidiary of COSCO Shipping Group, announced that its wholly-owned subsidiary, Cosco Shipping Container Lines Company Limited (COSCO Shipping Container Lines), had signed a contract for the construction of 12 methanol dual fuel 14,000 TEU container ships with Yangzhou Cosco Shipping Heavy Industry Company Limited. A day later, Cosco Shipping Development Company Limited (COSCO Shipping) made an announcement to sign an investment construction and chartering agreement for 42 bulk carriers.
China Merchants Energy Transportation Company Limited (referred to as China Merchants Ship) has ordered more than 30 new ships this year, at the beginning of the year, China Merchants Ship ordered the construction of six 174,000 cubic metres of liquefied natural gas (LNG) carriers, Hudong-Zhonghua ordered the construction of four 271,000 cubic metres of QC-Max-type LNG carriers, which are 10 ships for the Qatar Energy Company (Qatar Energy) ‘In June, China Merchants Ship returned to the large bulk carrier market after a nine-year hiatus, ordering eight 210,000 dwt Newcastle-type bulk carriers and signing a contract for two more 210,000 dwt bulk carriers. China Merchants Ship is for the national strategic materials transport needs, to create ‘national cargo national transport’ of the shipping industry chain business cooperation system. Another not long ago, China Merchants Ship under the Haihong Ship (Hong Kong) Limited tenders for the construction of five ultra-large tankers (VLCC) and five Aframax tankers.
In addition, the U.S. shipowners ranked second, invested $ 14.6 billion in 32 ships, investment focus on large cruise ships, with more than 4,000 beds cruise ships accounted for 50 per cent of the value of U.S. investment. Greek shipowners ranked third with $13.6 billion invested, with tankers accounting for 46 per cent, followed by gas carriers at 28 per cent and container ships at 14 per cent.
This investment is on the verge of explosive returns
The future of the shipping industry continues to be challenged by green transformation and technological innovation, with energy-efficient technologies and the use of alternative fuels becoming increasingly important as the global demand for decarbonisation rises. Upgrading facilities at shipyards and ports, as well as investing in new technologies, will be key to the industry's long-term growth.
Speaking at the Capital Link conference in London, senior market analyst Martin Stopford said that investment in a new generation of low-emission newbuildings is expected to peak in 2036, but this could be delayed by up to 10 years if the technology is not ready.
The shipping industry's goal of net-zero emissions by 2050 will require significant investment in new ships to drive the change, but it remains uncertain which cleaner fuels will be the future, Martin Stopford said, adding that investment in newbuildings will increase by the 2030s but that a significant ‘hold-up’ in technology could delay the process. But huge technological ‘hold-ups’ could delay the process.
According to Martin Stopford, supercycles can last for decades and are characterised by increasing investment in shipping accompanied by periods of consolidation. His analysis suggests that the first supercycle covers the long period of transition from sail to steam that began in the 1860s.
It is said that the global order book for new ships may be expected to reach US$5.3 trillion by 2050, which is not only an opportunity for the shipbuilding industry, but also a milestone in the green transformation of the shipping industry.
In 2007, the global newbuilding market reached a record high of 93 million CGT. From 2003 until 2007 (before the outbreak of the global financial crisis in 2008), the market set a new record in five consecutive years, and this round of market upturn is widely regarded as the ‘super cycle’ of the newbuilding market.
Since the current round of newbuilding market recovery, the market has climbed to new heights at a rapid pace, even though almost no one thought the market would reach the peak of the previous super cycle. Signs similar to the last ‘super cycle’ are already visible and seem to be reminding the industry that we are in the middle of it.
It is certain that the newbuilding market has entered a new cycle, with positive market fundamentals and the potential for stable development in the medium to long term. However, in the face of accumulating uncertainties, especially those macro risks that may affect the overall situation, even if the market continues to prosper and the future outlook is bright, we still need to remind the industry to keep a keen sense of market changes and to anticipate risks well in advance in order to prevent them from occurring in the first place.
https://www.cnss.com.cn/html/hygc/20240922/354634.html
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