The global shipbuilding market will reach [ds_preview]the bottom of the orderbook cycle not before 2018, says classification society American Bureau of Shipping (ABS). Meanwhile there seems to be a new ULCS order.
In its recent market report, ABS expects a »notably lower orderbook overall over the next 5+ years«. The prime driver so far this year would be a lack of new orders due to weak demand, excess supply and a remaining large orderbook overhang.
On the demand side, a sluggish global GDP growth is expected to continue, with a small retraction expected this year, and only minimal improvement in 2017. »The dramatic drop in oil prices has pushed the Offshore industry into a downturn that is projected to last a few years. It spurred an uptick in Oil Tanker investment activity last year, which has slowed and expected to taper off«, ABS said. With the China slowdown projected to be the new norm, dry bulk trade growth would be weak for the foreseeable future; negatively impacting new Bulk Carrier investment for the next several years. Gas carrier ordering demand, undermined by weak energy prices, and is expected to slowly improve over the next few years fueled by environmental concerns.
Large Container Ship ordering has slowed with weak demand and building excess capacity. »It is not expected to pick up until 2018, dependent on economic growth and how the new alliances shake out«, the report added. The report came up just one day before a new ULCS order appeared. Yoo Hoan Jo, Managing Director at Hanjin Heavy Industries subsidiary in the Philippines is cited at shipping journal Tradewinds that the yard will build three container vessels with capacity for 20,600 TEU. However, no more details about the customer were disclosed.
World fleet GT growth has notably slowed due to a high level of scrapping and new build delivery slippage. »Scrapping and service removals which have been very robust this year, has only made a dent in the excess supply situation; offset by the inflow of new buildings«, ABS added. There is a significant projected drop in new GT orders for 2016, »with continued weakness in 2017 and possibly 2018 as well, when new orders will likley match deliveries…marking the bottom of the orderbook cycle«.
