Global Orderbook at Seven-Year High After Strong Start to 2021

global shipbuilding order book rises in 2021
Global orders rose signfiicantly in 2021 with China have the largest orderbook (file photo)

Published Jul 6, 2021 8:52 PM by The Maritime Executive

The global shipbuilding industry is benefitting from the strong rebound in shipbuilding orders coming from the shipping community in 2021. According to six-month data from the market research firm Clarkson Research Service, the global order book stands at a seven-year high as of June 30, 2021.

Both Chinese and South Korean shipbuilders reported strong increases in orders this year. The two countries remain the largest shipbuilders moving largely in unison for the first six months of the year.

During the first six months of 2021, Chinese shipbuilders recorded orders totaling 10.59 million compensated gross tons (CGT) giving the country the largest increase in new orders. However, the gap between China and South Korea was less than half a percent of the total orders for the two countries in the first six months or just 120,000 tons. South Korea’s shipbuilders recorded total orders for 10.47 million tons in the first half of the year.

Clarkson reports that global new orders in the first six months of the year rose by nearly three times 2020 levels. The global shipbuilding industry reported 24.02 million CGTs in new orders between January and June 2021, compared with just 8.24 million tons in 2020.

The rebound in orders during 2021 is also helping the shipbuilding industry to rebuild its backlog with orders now extending out to 2024 and beyond in key categories such as containerships. The global backlog is measured at nearly 81 million tons, rising by two percent in June. China's shipyards are showing the largest backlog at 30.41 million tons, or 38 percent of the shipbuilding total. South Korea’s shipyards follow closely with 26.73 million tons, which represents 33 percent of the total. Japan remains in third place in the shipbuilding industry with a backlog of 8.66 million tons or 11 percent of the global orderbook.

Compared with a year ago, South Korea's order backlogs rose 34 percent, while China up 8 percent. Japan's order backlog however fell 21 percent.

Clarkson's Newbuilding Price Index, indicating price changes for shipbuilding contracts, showed a modest increase in June, reaching 138.5 points, which was up 14 percent since March 2017, when it hit 121.4 points.

China was behind South Korea in the most recent month. Orders for a total of 131 ships representing 4.15 million tons were recorded in June with South Korea receiving nearly 45 percent of the orders based on tonnage or a total of 40 ships representing 1.82 million tons. China received 38 percent of the orders based on tonnage while Japan received approximately seven percent of the orders with the remainder scattered among several countries.

South Korea's shipbuilders are highlighting that their rate of new orders so far in 2021 was up more than seven times the rate in 2020. They are reporting that they have already achieved more than half of their annual order targets for 2021.