Newbuilding orders for container ships reach 5.6 million TEU, is the "boom" about to end?

Clarksons Research said: “As a result of the strong performance in the liner shipping market, the sentiment is

extremely high and newbuilding investment has surged to record levels. In the year

to end-September 2021, newbuilding orders measured in TEU haveaken the record set in any previous year.

”By the end of September, 468 ships of 3.9 million TEU of newbuilding orders had placed,

surpassing the 2007 full-year record of 3.3 million TEU. At the moment, Clarksons latest data

shows that orders for contains have increased to 5.6 million TEU by the end of the third quarter,

a year-on-year increase of 185% and more than twice level at the beginning of the year.

The current orderbook is said to represent 23% of the existing fleet, the highest since April 2014 However, the current

situation is still modest compared to the period 2000-2009. The ratio was as high as 61% in 208.

Clarksons said that large vessels accounted for 75% of total new orders by volume and dominated the scene.

However, recent contract data suggest that the is also picking up for relatively smaller and more handy vessels.

The volume of orders for medium-sized ships of between 12,000 TEU and 16999 TEU has increased recently,

with 89 ships of 600,000TEU contracted for this size bracket as of end-September, for 10% of total orders.

“Shipowners and operators have both been active in the wave of new containership building. From the fourth quarter of 220

to the third quarter of 2021, 48% of contracts were by shipowners, and 52% by operators,” Clarksons said.

Specifically, 46% of new orders in the 12,000 TEU-16,999 TEU range were by ship and 54%

by operators, while for the 4,000 TEU-7,999 TEU size bracket, where there is a “keen” by shipowners,

60% of orders since September 2020 have gone to the former.

Orders for new ships also reflect the market’ increasing interest in alternative fuels and environmental technologies,

Clarksons said. “Whilst industry agreement on choice of technology and fuel has yet to be reached, LNG dual-fuel

contains remain a popular choice for shipowners. As of end-September 2021, 57 ships of 7.0 million TEU

that can operate onNG have been contracted, which has increased this category of order to 85 ships of 12.0 million TEU.

”The analyst added that LNG accounted for nearly one-fifth of this year’s total orders. Even so,ships with scrubbers

still enjoy widespread popularity among owners. As of end-September, the intake in terms of capacity accounted for

nearly half of the total.

However, Clarksons warned that the “boom” in containership newbuilding orders seen over the last may be drawing

to a close, given concerns over potential overcapacity in the market.

“With orders at record high levels, the market widely expects pressure on material supply in2023.

At the moment, orders for 2023 stand at 2.2 million TEU, equivalent to 8.6% of the fleet year. By end-September 2021,

it is expected that 1.9 million TEU of containerships will be delivered;a further large volume of are expected in 2024.”

Source: Shipping Circle