The shipyards become the next victim of the deteriorating conditions in the dry bulk, container and offshore markets as 2016 looks to set the record for the lowest newbuilding contracts in more than 20 years.
After a decline from 2010 to 2012, shipbuilding had a rebound in 2013 and was expected to level out over the next few years. The reality was a slight decline in 2014 and 2015, but still high levels of contracting measured by compensated gross tonnage (CGT). Since then, shipyards have crashed, as the contracted CGT globally has reached its lowest level since on record.
Peter Sand Chief Shipping Analyst at BIMCO comments:
“Since the high contracting in 2013, BIMCO expected the shipyards could come under pressure. This expectation became a reality at the start of 2016, with Q1 contracting the second lowest CGT in 20 years.
A low level of contracting is exactly what the shipping industry needs in order to eventually restore the fundamental balance between supply and demand”.