Global ship orders could fall by more than half in 2008
Global ship orders may plunge by more than half this year after optimism about world trade and China's need for raw materials caused demand to surge in 2007, according to Lloyd's Register Group.
"It simply can't carry on at the unprecedented rates of last year,'' John Stansfeld, president of Lloyd's Asia, said in an interview in Shanghai. "It has to slow down.''
Orders for vessels to carry fuel, iron ore and consumer goods have all cooled this year amid concerns about a global slowdown and the subprime mortgage crisis. Hyundai Heavy Industries, the world's biggest shipbuilder, and other yards won a record 246.3 million deadweight tonnes of orders last year, 43 per cent more than in 2006, according to Clarkson.
"Uncertainty in the global market is making shipping lines hesitant about ordering more vessels,'' said Lee Jae Won, a Tong Yang Investment Bank analyst in Seoul. "Still, shipyards have a backlog of almost four years and ship prices remain at record levels, so it's still a shipbuilders' market at the moment.''
The price of a ship able to carry 6,200 20-foot containers reached $107 million at the end of March from $106.5 million at the end of last year, according to London-based Clarkson, the world's largest shipbroker. The price of a 300,000-deadweight-tonne oil tanker rose to $152 million last month from $146 million last year.
South Korea, the world's largest shipbuilding nation, also faces rising competition from China, which is aiming to make more complex and profitable vessels. China surpassed Japan as the world's second-biggest shipbuilder in 2006 and may rank first by 2015, Stansfeld said.
"For China to get to the top of the industry, it needs to diversify its vessel types,'' he added. "It will take a great deal of effort to get to the same level'' of sophistication as Japan and South Korea, he added.
China, which predominately makes bulk carriers at present, should be preparing to add more container ships and oil tankers, Stansfeld said. Later, it can move into areas including building vessels for liquefied natural gas and liquefied petroleum gas.
Chinese shipbuilders delivered 19 million deadweight tonnes of vessels last year, a 30 per cent increase from 2006. Those deliveries accounted for 23 per cent of the world's total.
New orders rose 32 per cent to 98.5 million deadweight tonnes, expanding the total order-book to 158.9 million deadweight tonnes, according to Lloyd's.
"It simply can't carry on at the unprecedented rates of last year,'' John Stansfeld, president of Lloyd's Asia, said in an interview in Shanghai. "It has to slow down.''
Orders for vessels to carry fuel, iron ore and consumer goods have all cooled this year amid concerns about a global slowdown and the subprime mortgage crisis. Hyundai Heavy Industries, the world's biggest shipbuilder, and other yards won a record 246.3 million deadweight tonnes of orders last year, 43 per cent more than in 2006, according to Clarkson.
"Uncertainty in the global market is making shipping lines hesitant about ordering more vessels,'' said Lee Jae Won, a Tong Yang Investment Bank analyst in Seoul. "Still, shipyards have a backlog of almost four years and ship prices remain at record levels, so it's still a shipbuilders' market at the moment.''
The price of a ship able to carry 6,200 20-foot containers reached $107 million at the end of March from $106.5 million at the end of last year, according to London-based Clarkson, the world's largest shipbroker. The price of a 300,000-deadweight-tonne oil tanker rose to $152 million last month from $146 million last year.
South Korea, the world's largest shipbuilding nation, also faces rising competition from China, which is aiming to make more complex and profitable vessels. China surpassed Japan as the world's second-biggest shipbuilder in 2006 and may rank first by 2015, Stansfeld said.
"For China to get to the top of the industry, it needs to diversify its vessel types,'' he added. "It will take a great deal of effort to get to the same level'' of sophistication as Japan and South Korea, he added.
China, which predominately makes bulk carriers at present, should be preparing to add more container ships and oil tankers, Stansfeld said. Later, it can move into areas including building vessels for liquefied natural gas and liquefied petroleum gas.
Chinese shipbuilders delivered 19 million deadweight tonnes of vessels last year, a 30 per cent increase from 2006. Those deliveries accounted for 23 per cent of the world's total.
New orders rose 32 per cent to 98.5 million deadweight tonnes, expanding the total order-book to 158.9 million deadweight tonnes, according to Lloyd's.