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The global shipbuilding industry has witnessed a significant rebound in the past two years

The global shipbuilding industry has witnessed a significant rebound in the past two years, primarily driven by a resurgence in freight rates following the COVID-19 pandemic. This surge has led to a notable increase in the orderbook-to-fleet ratios across various vessel segments. As of September 2024, the orderbook-to-fleet ratios for bulk carriers, tankers, and gas (LNG & LPG) carriers stood at 10.3%, 12.9%, and 48.4%, respectively. These figures represent substantial increases compared to the previous year and even two years ago. The orderbook-to-fleet ratio for bulk carriers, tankers, and gas carriers has grown by 43%, 180%, and 29% respectively over the past two years. While the container orderbook-to-fleet ratio has declined slightly by 10% since 2022, it remains relatively high (10.8% in tems of vessels, 24.6% in terms of TEU). The subdued freight rates during the past two years have contributed to this decrease. The expansion of the shipbuilding industry has also been evident in the number of active shipyards. The number of active shipyards worldwide has increased by 17.7% over the past two years, from 153 in June 2022 to 180 in September 2024. Chinese shipyards have played a pivotal role in this growth, with a remarkable 37% increase in active yards. In contrast, the number of active shipyards in Japan and South Korea has remained relatively stable.

Overall, the shipping industry is experiencing a period of robust growth, characterized by a significant increase in shipbuilding activity and a rising orderbook-to-fleet ratio across various vessel segments. But is the orderbook’s growth and the shipyards increase something to cause concern in shipping ? Probably not as the shipping industry is facing a significant challenge: an aging fleet. As we look ahead to 2030, it's evident that a substantial portion of today's vessels will be over two decades old. This aging fleet presents a multitude of concerns, from operational efficiency to environmental sustainability as the achievement of IMO 2030 goals is quite difficult to meet. In the bulker segment, nearly 30% of the current fleet, both in terms of vessels and deadweight tonnage (DWT), will be over 20 years old by 2030. This aging trend is particularly pronounced in the larger vessel sizes, such as Supramax/Ultramax, Panamax/Kmax, and Cape/Nuke, where 27-28% of the current fleet will exceed 21 years of age. The tanker fleet is also experiencing a similar aging process. Approximately 48% of today's tanker fleet, representing 284.89 million DWT, will be over 21 years old in 2030. When combined with the 831 vessels that will be 19-20 years old, it becomes clear that a significant portion of the tanker fleet is nearing its end of life. Panamax/LR1 and Handysize/MR1 segments are particularly vulnerable, with 62% and 66% of their respective fleets expected to be over 21 years old by 2030. Neither the container and gas fleets are not immune to this aging trend. In 2030, 49% of today's container fleet, in terms of vessels and TEU, will be over 21 years old. Smaller container vessels, such as those between 3,000 and 7,999 TEU, are particularly affected, with 60% of the current fleet expected to exceed 21 years of age. In the gas carrier segment, approximately 42% of the fleet will be over 21 years old in 2030. Despite the recent boom in newbuilding orders, the pace of vessel deliveries is insufficient to rejuvenate the aging fleet. Even assuming a consistent annual delivery rate of 1,200 new vessels until 2030, it would only be possible to replace 70% of the vessels that will be over 21 years old by that time.

Sale and Purchase

Dry:

On the Capesize sector, the “SG Express”- 180K/2009 Dalian was sold for USD 27 mills, while the 4-year-older “Lila Cochin” - 174K/2005 SWS was sold for USD 18 mills to Chinese buyers. Moving down the sizes, Greek buyers acquired the Post-Panamax “Lowlands Energy” - 96K/2013 Imabari for USD 23 mills. The Electronic M/E Kamsarmax “Nord Pluto”- 82K/2014 was sold for USD 24 mills to Greek buyers, while the Electronic M/E and Scrubber fitted “Nord Virgo” - 81K/2014 JMU found new owners for USD 26 mills. Moreover, on the same sector, German buyers acquired the “Bulk Portugal” - 82K/2012 Tsuneishi for USD 22.5 mills basis 5-year BBHP. On the Ultramax sector, the “Theresa Pride” - 63K/2021 Oshima was sold for 39 mills to Middle eastern buyers. 2x Supramax vessels, the “Lascombes” - 57K/2011 Qingshan and the “Gruaud Larose” - 57K/2011 Qingshan found new owners for USD 12.8 each. Finally, the Ice Class 1C Handysize “Kujawy”- 39K/2005 Tianjin Xingang was sold for a shade below USD 8 mills.

Wet:

On the VLCC sector, the “Gesi” - 306K/2007 Daewoo was sold for USD 43.25 mills. On the MR2 sector, Italian buyers have exercised their purchase option on the “High Navigator” - 50K/2018 JMU for USD 34.4 mills, while the “Butterfly” - 46K/2004 STX was sold for USD 18 mills to Chinese buyers.

Xclusiv Shipbrokers Inc.