The latest data from Clarkson, a British shipbuilding and shipping market analyst, shows that after a decade-long decline in capacity, global shipyard capacity has gradually begun to recover slightly. Global newbuilding deliveries in the first quarter of 2024 were 10.1 million compensated gross tonnage (CGT), a seven-year quarterly high. Clarkson expects that shipyard capacity to grow by 15% for the full year 2024 to 40.6 million CGT.
In its latest weekly report, Clarkson noted that “with rising ship prices (up around 40% since 2020, despite significant increases in shipyard costs), a strong forward order book and good cross-industry order demand, shipyard capacity has become a limiting factor for new ship deliveries.” The total number of active shipyards globally has fallen by two-thirds since 2010, the research organization said.
Analysts at Danish Ship Finance remain optimistic about the short-term outlook for the shipbuilding industry, noting that global shipyard utilization is expected to peak in 2024, but may fall back in the following two years (2025, 2026).
In a report released last week, the firm noted, “Continued firm newbuilding orders and limited shipyard capacity are driving newbuilding prices closer to record levels. Since 2023, global shipyard capacity has increased by 6 million CGTs to 59 million CGTs.”
The Danish Ship Finance Corporation report shows that a large number of restarted new shipyards in China is the main factor in the increase of global shipyard capacity. Since last year, China has a number of bankrupt shipyards “restarted” production, such as Hengli Heavy Industry, the new Jiangzhou Shipbuilding Heavy Industry, Quanzhou Shipyard and Dalian shipbuilding Offshore etc.
In January 2023, Hengli Heavy Industry (formerly known as STX Dalian Shipbuilding), which was acquired by Hengli Heavy Industry Group Co, Ltd, a subsidiary of Hengli Group, and renamed and restarted, went into full operation.
Since its restart, Hengli Heavy Industry has not only committed to undertake mainstream bulk carriers, very large crude carriers (VLCC) and other ship types to expand market share, but also cooperated with Samsung Heavy Industries to build container ships in order to enter the field of large-scale international-class container ship construction. At present, Hengli Heavy Industry’s first built ship has been delivered, and holds orders for several bulk carriers and two VLCCs.
On March 31, 2023, Jiangxi New Jiangzhou Shipbuilding Heavy Industry was formally established and its major investors of the Company are QinShi Group and Jiangsu angtze Group. The predecessor of the company – Jiangxi Jiangzhou Union Shipbuilding for the former state-owned Jiangzhou Shipyard. Up to now, New Jiangzhou Shipbuilding Heavy Industry has obtained many ship orders from domestic and foreign shipowners.
On August 30, 2023, Dalian shipbuilding Offshore announced that it had received its first independent contracted order after bankruptcy and reorganization, and in the same year, it signed a contract for 1+1 7,500m3 CO2 liquefied carriers with Germany’s Beuys Group. Currently, while focusing on the development of LCO₂ Carriers, Dalian shipbuilding Offshore is also stepping up its efforts to dispose of its drilling rigs.
On September 30, 2023, Quanzhou Shipyard, which entered bankruptcy proceedings in 2019, announced the resumption of work and production, formerly known as Quanzhou Shipbuilding Industry Co.,Ltd., which was established in 2004.
According to Quanzhou Jiaofa Real Estate Investment Groups official web site, the capacity of Quanzhou Shipyard’s ship repairing business is further enhanced under regular operation, aiming at the achievement of Quanzhou Shipyard’s overall revitalization in 2024.
According to data from Review of Maritime Transport 2023, released by the United Nations Conference on Trade and Development (UNCTAD) last September, shipyards need to rapidly expand their capacity to help the shipping industry make a green transition. The report states, “Shipyard capacity is currently being constrained. Tanker and dry bulk owners are facing long turnaround times for new shipbuildings deliveries as well as high construction costs. Improving shipbuilding capacity is therefore essential to ensure that the shipping industry meets global demand and achieves sustainable development goals.”
While some shipbuilding insiders are predicting bottlenecks at shipyards and shipbuilding head honchos are mulling over expansion plans for the first time since the global financial crisis. However, Danish Ship Finance takes the opposite view and believes that maritime trade will decline in the coming decades. The Danish Ship Finance report predicts that demand for shipyard capacity could fall by 25% by 2040.