Surge in New Ship Orders Boosts Asia’s Shipbuilding Industry

Asia’s largest shipbuilders are currently experiencing a surge in orders from Western shipowners, with newbuild prices reaching levels comparable to those seen in 2008, as reported by Clarksons. The average newbuild price stands at around $90 million, nearly double the 10-year average of $50 million per hull. This increase is attributed to strong ordering volumes, firm forward cover, and inflationary pressure, giving yards an advantageous position in price negotiations. Korean and Chinese yards are particularly attracting orders for high-value LNG carriers and container ships with dual-fuel capabilities.

Large shipowners with access to capital are better positioned to place orders due to the high newbuild prices. The top 50 shipowners by tonnage account for over half of the capacity on order, with companies like MSC leading the market with 100 container ships and 1.2 million TEU of capacity. In the LNG sector, QatarEnergy and its partners are collectively ordering over 100 LNG carriers, valued at more than $30 billion. However, over 90 percent of shipowners in Clarksons’ database currently have no vessels on order.

The concentration of orders among a few major players is influenced by factors such as the increasing uptake of alternative fuels, access to finance, and uncertainty surrounding newbuild prices, yard lead times, and technology. This trend, along with the high cost of newbuilds, is deterring some shipowners from investing in new vessels. Despite the ordering boom, a significant portion of shipowners are opting to sit out and not place any orders at this time.

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