Ordering Activity Shows Signs of Recovery

Shipping consultancy Clarksons says that newbuild ordering activity remained quite low in 2017, though it improved over the rock-bottom levels seen at the bottom of the business cycle in 2016. 

Total orders were up at 902, 50 percent better than the 604 orders placed the year before. However, notes analyst Alex Springer, this is still well below historical averages, and it is only the third time in two decades that total orders came in below 1,000 hulls. 

Bulkers saw the biggest rebound by far, with orders totalling fully 400 percent more than the prior year numbers. The category saw easily the largest jump and the largest total amount of ordering activity as dry bulk markets recovered. 

Ordering in the tanker sector was also strong, with 271 orders placed, up from 188 in 2016. High-value-added gas carriers were also popular. 

Unsurprisingly, the offshore market remained weak, with only 37 orders for offshore vessels. Container ship owners also showed restraint, at least when measured by vessel count: total boxship orders stood at 108, up by just 10 percent from the disastrous year before. 

Chinese shipbuilders led the way for total new orders last year, snagging about 40 percent of the world's total. South Korean yards' order intake improved considerably relative to 2016 levels, but still remained low in historic terms. And European yards took home about 40 percent of the total contract value, led by the boom in sophisticated cruise shipbuilding. 

Despite strong ordering last year, the world's orderbook (including preexisting orders and vessels under construction) is still shrinking, says Clarksons. The backlog shrank to 197 million dwt, the first time since 2004 that it has fallen below the 200 million mark. As it falls, the number of yards with construction activity has declined as well: there are now only about 360 shipyards with at least one large vessel on order.