21 Feb 2018, Global – The global shipping industry newbuild vessel orderbook-to-fleet ratio has fallen back to 10%, a level we last saw 20 years ago, implying more rational shipping fleet expansion going forward. Cruise ships, LNG carriers and Drillships have the highest newbuild vessel order backlogs relative to their existing fleets and will lead newbuild expansion…
GLOBAL SHIPPING INDUSTRY NEWBUILD VESSEL ORDERBOOK-TO-FLEET RATIO BACK TO 20-YEAR LOW OF 10%
There are nearly 95,000 existing vessels in the world today plus another 3,500 on order, amounting to 10% of the global existing shipping capacity. We have not seen this level of more rational shipping fleet expansion since 1999-2000 in the aftermath of the Asian financial crisis.
Chart: Global newbuild vessels orderbook-to-fleet ratio back to 20-year low (1999-2018)
CRUISE SHIPS, LNG CARRIERS, DRILLSHIPS AND PSV VESSELS SEGMENTS HAVE THE MOST AGGRESSIVE FLEET EXPANSION PLANS
Among the major shipping segments, the cruise shipping industry has the highest orderbook-to-fleet ratio. There are 90 cruise ships on order globally, amounting to 40% of the global existing cruise shipping capacity. This is four times the global shipping industry’s newbuild vessel orderbook-to-fleet ratio of only 10%. However, the newbuild cruise ship delivery schedule is spread out in the coming years. Only 18 cruise ships expected to be delivered for the rest of 2018, adding a moderate 6% to the global existing cruise shipping capacity which should be met by demand growth.
The Liquefied Natural Gas (LNG) shipping segment has the second highest newbuild vessel orderbook-to-fleet ratio at 23%. This is followed by the Drillships segment where the orderbook-to-fleet ratio is at 21%. Platform supply vessels (PSV) also have a substantial orderbook-to-fleet ratio of 13%, the bulk of which are expected to be delivered for the rest of 2018.
The crude oil tanker and container shipping segments also have higher orderbook-to-fleet ratios than the global shipping industry average ratio at 12% each.
Chart: Global shipping industry vessel orderbook-to-fleet ratio (Feb 2018)
SIGNIFICANT NEWBUILD VESSEL ADDITIONS IN 2018 COULD CAP RATE RECOVERY IN LNG SHIPPING, DRILLSHIPS AND OFFSHORE VESSEL SEGMENTS NEAR TERM
62 newbuild LNG carrier deliveries are expected to add 13% to the global existing LNG shipping capacity for the rest of 2018 assuming no vessel demolition, and delivery slippage. This could cap the recent recovery in LNG carrier spot rates.
Chart: LNG carrier spot rates in US$ per day (2013 to 2018)
In the offshore marine segment, the delivery of 153 newbuild Platform supply vessels (PSV), 135 Anchor handling tugs and 10 Drillships for the rest of 2018 will add 11%, 8% and 8% to the global existing fleet capacity which could keep day rates under pressure as well.
There are 136 scheduled newbuild crude oil tanker deliveries for the rest of 2018 which will add 7% to the global existing crude oil tanker shipping capacity, assuming no vessel delivery slippage and order cancellation, which could cap spot freight rates.
Supply growth looks relatively more moderate in the global dry bulk shipping and container shipping segments in 2018.
In the container shipping sector, 198 newbuild containerships are expected to be delivered for the rest of 2018 which will add 5% to the global existing container shipping fleet capacity.
In the dry bulk shipping sector, 341 bulk carriers are expected to be delivered for the rest of 2018 which will add 4% to the global existing bulk shipping fleet capacity.
Chart: Expected gross fleet capacity growth following newbuild vessel deliveries for the rest of 2018
Disclaimer: The contents of this website are strictly for information purposes only. This website does not contain any investment, financial, tax, legal or insurance advice; you should always seek such advice only from professionals who are qualified, licensed and regulated in the respective relevant field. Please read our Terms of Service before accessing or using this website.