Newbuilding Prices Hold Near a 2009 High as the Orderbook Tops 179 Million CGT and Tanker Contracting Triples

The combined orderbook for bulk carriers, tankers, LNG and LPG carriers and containerships stands at 179.1 million compensated gross tonnes, 25.0% more than a year earlier and the largest in 20 years, shipbroker Banchero Costa said in a newbuilding report published on October 31. Containerships account for 38% of it, ahead of bulk carriers at 18% and LNG carriers at 16%. Relative to the existing fleet the orderbook is heaviest in containerships at 43.5%, LNG carriers at 40.9%, LPG carriers at 38.5% and crude tankers at 29.3%, against 14.2% for bulk carriers. For bulkers and crude and product tankers together the book is 2,700 ships and 326.5 million deadweight tonnes, or 19.1% of the fleet, 41% more than a year ago and 2.7 times the 2021 level.

Tankers are doing the work. In January to September, 267 crude tankers of 67.0 million DWT were ordered, up 267.7% year on year, including 172 VLCCs, while bulk carrier ordering held steady at plus 4.7% in DWT terms. LNG contracting reached 83 ships of 13.12 million cubic metres against 35 ships a year earlier, and 519 containerships of 4.05 million TEU were ordered, 89% of them at Chinese yards. Prices reflect that mix: in September a VLCC was assessed at USD 131.0 million, up 7.4% year on year and the highest since March 2009, and a Capesize at USD 79.0 million, up 3.9%, while a 20,000 TEU containership eased 4.8% to USD 210.4 million and a 180,000 cubic metre LNG carrier fell 3.3% to USD 242.0 million.

Yard capacity is the binding constraint and the source of the next problem. Chinese yards hold 75% of the bulk carrier and tanker orderbook and are scheduled to deliver 89.1 million DWT of those ships in 2028, against a national record of 62.6 million DWT in 2011. Banchero Costa expects tanker newbuilding prices to stay firm into 2027 with the main yards full until 2029, but sees limited further upside as new Chinese capacity comes on stream. Because 33% of this year's contracting in CGT went to new or revived yards, delay risk and the 2028 delivery peak are the two things the broker flags.

Orders are still being signed at those levels. Hanwha Ocean said on October 30 that it had won a KRW 356.8 billion contract, about USD 250 million, to build two VLCCs for a Bermuda-based owner at its Geoje yard, with delivery by the second half of 2030, lifting its backlog to 44 vessels worth USD 8.11 billion, 21 of them VLCCs. Elsewhere in the week COSCO Shipping Bulk reportedly booked 16 handysize bulkers of 87,000 DWT at Fujian Mawei at about USD 49.5 million each, HMM contracted seven 13,000 TEU ships at Hyundai Samho at roughly USD 180.1 million apiece, and Nanjing Tanker took four 115,000 DWT LR2 tankers at Dalian Shipbuilding.