“Compared to the most recent low level reached at the end of 2020, they have increased by 53%”
London – According to the latest data released by Bimco, the prices of new-build ships have reached highest level in the last 16 years.
“Since the beginning of the year, new construction prices have increased 3%, reaching the highest level since 2008. Compared to the most recent low level reached in late 2020, they have increased 53%. Over the same period, the order book grew by 72%, reaching the highest level since the beginning of 2012 and increasing by 2% year to date,” he explained Niels Rasmussen, Chief Shipping Analyst of the association. The global order book currently stands at 133 million compensated gross tonnage (CGT), an increase of 56 million CGT from the most recent low recorded in 2020. LNG tankers and container ships accounted for 35% and 30% of the increase, while bulk carriers, oil tankers and LPG carriers accounted for the remainder. The order book for container ships peaked during the first quarter of 2023 and has declined since then. Year-to-date, container ship order backlog is down 16%, deviating from the overall growth trend along with bulk carrier order backlog which is down 3%.
“So far this year, the tanker and transportation of liquefied natural gas have been the main drivers of growth in the global order book. Furthermore, order books for LPG tankers, cruise ships, chemical tankers and Ro-Ro ships have seen double-digit growth,” Rasmussen said. Between 2010 and 2020, the order book-to-capacity ratio has stood at 2.2, falling to 1.7 in the second half of 2017. Since then, the ratio has risen from 2.1 at the end of 2020 to the current level of 3.7, the highest since 2010. “This improvement helped fuel the price increase. The 53% increase in just 3.5 years may seem dramatic, but it’s worth remembering that the average annual price increase between 2010 and 2024 was only 2.3%, even though manufacturing wages in China have more than tripled. Looking ahead, the need to start replacing generations of ships built in the 2000s, as well as the need to decarbonise, appear to bode well for future contracts. Avoiding a massive build-up of shipyard capacity as in the 2000s will be crucial if yards are to avoid an increase in overcapacity and a scenario where prices can fall again to the levels seen in the 2010s,” according to Rasmussen.
