Weak Bulk Carrier Market and Disappearance of Demand for Newbuilds

「The global newbuilding market has maintained a high level of orders since 2021, while completions have increased year after year and the volume of vessels under construction has continued to rise.」

「The global newbuilding market has maintained a high level of orders since 2021, while completions have increased year after year and the volume of vessels under construction has continued to rise.」

「The company positioned the current interim period as a transition toward a strategy of making large bulk carriers, for which record-high construction volumes were achieved around 2010 and substantial replacement orders are expected to continue from 2025 onward, and large LPG carriers (VLGCs), for which imports of US-produced LPG are expected to increase, core and secondary core products alongside handy-size bulk carriers.」

「Chinese shipyards became a dominant presence, ranking first worldwide for the 15th consecutive year, with their completions, orders and work in hand measured in deadweight tons (DWT) accounting for 55.7%, 74.1% and 63.1%, respectively, of the global total.」

「The global newbuild market recovered alongside the recovery in newbuild demand from 2021. Global newbuild completions from January to December 2023 returned to the 60-million-gross-ton range seen before the COVID-19 pandemic, while Japanese shipyards continued to build up their work in hand, helped by higher ship prices and the weaker yen, despite concerns about soaring materials and equipment prices and labor costs.」

「The order backlog at the end of the third quarter of the current fiscal year totaled ¥288,665 million, up 27.3% year on year.」

「The company received orders for a total of 12 vessels, including 2 large bulk carriers, bringing the order backlog at the end of the second quarter of the current fiscal year to ¥277,763 million, up 24.7% year on year.」

「The global newbuild market was on a recovery trend as the supply-demand balance improved and demand for environmentally compliant vessels expanded, and newbuild order prices also began to rise. However, manufacturing costs continued to increase because of historically high prices for materials and equipment, while concerns remained about the impact of the Ukraine situation and US-China tensions on shipping market conditions, leaving the outlook uncertain.」

「Global newbuild demand remained at a low level in the second half of 2022 because of the mismatch between persistently high newbuild prices and charter rates. However, dry bulk carriers and tankers had relatively low order backlogs to begin with, and demand for fleet renewal is expected to gradually strengthen from 2023 as measures such as improving the fuel efficiency of existing vessels begin, narrowing the gap between ship prices and charter rates and leading to a certain level of ordering and contracting,」

「Against a backdrop of favorable shipping market conditions, shipyards worldwide steadily accumulated orders, and global work in hand reached an average of more than three years. However, many shipyards in Japan, South Korea and China remained in difficult operating conditions as soaring steel prices compounded the construction of low-margin vessels ordered during the downturn.」

「Favorable business conditions continued for the maritime industries of each country, and the major shipbuilding countries of Japan, South Korea and China secured two to three years of work in hand.」

「The global newbuild business saw shipowners' appetite for construction recover and newbuild negotiations become more active as shipping market conditions improved. This reflected progress in the supply-demand balance for vessel capacity after newbuild orders had remained below completions for five years since 2016, as well as a sharp increase in container cargo movements driven by stay-at-home demand during the COVID-19 pandemic.」

「According to the Japan Shipbuilders' Association, global newbuild orders totaled 14.90 million gross tons from January to June 2020, compared with 44.17 million gross tons, three times that amount, from January to June 2021. China recorded more than double its previous-year volume, while South Korea exceeded ten times its previous-year volume. Japan's volume, however, was limited to 1.2 times the previous-year level.」

「The global shipbuilding industry had experienced low operating rates for five years since 2016, with newbuild orders below completions. However, as the supply-demand balance for vessel capacity improved and shipping market conditions turned favorable, newbuild demand expanded sharply from the end of the previous year, particularly for containerships.」

「At the beginning of 2021, the supply-demand balance for vessel capacity improved as seaborne cargo volumes finally recovered. As a result, freight rates remained high from January to March, normally a slow season, particularly in dry bulk shipping, and newbuild prices also began to rise from their December low,」

「Global newbuild orders from January to September 2020 totaled 18.42 million gross tons, down 41.2% year on year, while newbuild completions totaled 45.67 million gross tons, down 11.8%. Since 2016, newbuild orders had continued to fall below completions,」

「Global newbuild completions from January to June 2020 totaled 30.41 million gross tons, down 12.3% year on year, while newbuild orders totaled 11.14 million gross tons, almost one-third of completions and down 49.6%. The newbuild order backlog totaled 127.62 million gross tons, down 11.1%, falling below the equivalent of two years of construction based on the average annual global construction volume of 65 million gross tons in recent years.」

「Global newbuild completions from January to March 2020 totaled 15.09 million gross tons, down 18.8% year on year, while newbuild orders totaled 6.97 million gross tons, down 39.9%. As orders fell substantially below completions, the newbuild order backlog continued to decline, falling 9.1% year on year to 136.20 million gross tons.」

「Global newbuild orders from January to September 2019 totaled 28.45 million gross tons, down 31.1% year on year, while global newbuild completions totaled 51.80 million gross tons, up 11.6%. Orders continued to fall substantially below completions, a trend that had persisted since 2016.」

「Newbuild orders from January to June 2019 totaled 17.87 million gross tons, down 37.1% year on year, while global newbuild completions totaled 34.69 million gross tons, up 3.9%. Orders continued to fall substantially below completions, particularly in Japan and South Korea, where they were less than half the year-earlier level.」

「Global newbuild orders from January to March 2019 totaled 11.14 million gross tons, down 32.5% year on year, while global newbuild completions totaled 18.58 million gross tons, up 2.6%. Orders continued to fall substantially below completions, accelerating the decline in work in hand at shipyards in each country.」

「Newbuild orders increased 19.1% year on year to 51.43 million gross tons, but orders continued to remain below completions.」

「Global newbuild completions from January to September 2018 totaled 46.42 million gross tons, down 16.6% year on year, while newbuild orders totaled 39.78 million gross tons, up 43.1%. Although orders remained below completions from 2016,」

「Global newbuild completions from January to June 2018 totaled 33.38 million gross tons, down 16.3% year on year, while newbuild orders totaled 26.82 million gross tons, up 82.4%. Although newbuild orders surged year on year, they remained well below completions. Shipping market conditions were on a recovery trend as excess vessel capacity continued to be adjusted, and newbuild prices were gradually improving. However, against a backdrop of a sharp rise in manufacturing costs caused by worldwide increases in steel prices, shipyards had no choice but to seek further improvements in ship prices from shipowners, and orders recently began to stagnate.」

「Global newbuild completions from January to March 2018 totaled 18.11 million gross tons, down 19.9% year on year, while newbuild orders totaled 13.72 million gross tons, up 158.8%. Although orders were substantially above the record-low level of the year-earlier period, they remained below completions.」

「Newbuild orders totaled 42.66 million gross tons, up 126.9% from the previous year's 18.80 million gross tons, which was the lowest level since the 2007 peak of 170 million gross tons, as South Korean and Chinese shipyards pursued aggressive order-taking with public support. However, orders remained below completions for the second consecutive year.」

「According to the Japan Shipbuilders' Association, global newbuild completions from January to September 2017 totaled 55.66 million gross tons, up 4.9% year on year, while newbuild orders totaled 26.10 million gross tons, up 80.0%. Orders increased substantially year on year as newbuild prices began to show signs of rising, but they were still less than half of completions, and low-priced orders for short-delivery vessels taken by South Korean and Chinese shipyards facing insufficient order backlogs, with government support, were preventing a full recovery in ship prices.」

「Global newbuild completions from January to June 2017 totaled 39.86 million gross tons, down 0.1% year on year, while newbuild orders totaled 13.06 million gross tons, up 5.3%. Shipyards in South Korea and China, where orders had remained sluggish and securing work in hand had become an urgent priority, pursued orders at low prices with government support, resulting in a slight increase in newbuild orders and becoming a major factor preventing newbuild prices from rising. However, orders had not even reached one-third of completions, and signs were emerging that conditions in the shipping and shipbuilding industries, where excess vessel capacity was steadily being adjusted, were beginning to change.」

「As newbuild orders fall well below completions and shortages of work in hand become more serious, shipyards worldwide are engaged in fierce competition for orders in an effort to survive.」

「Newbuild orders during the period totaled 17.97 million gross tons, below 20 million gross tons and down 76.7% year on year, reaching a record low not seen for 24 years.」

「According to the Japan Shipbuilders' Association, global newbuild completions from January to September 2016 totaled 53.08 million gross tons, down 2.8% year on year, while newbuild orders totaled 15.12 million gross tons, down 74.8%. Japan Ship Exporters' Association data showed that contracts for Japan's export ships in calendar 2016 totaled 3.72 million gross tons, down 83% year on year, falling to the lowest level in the past 20 years.」

「According to the Japan Ship Technology Research Association, global newbuilding completions from January through June 2016 totaled 39,882 thousand gross tons, up 8.6% year on year, while newbuilding orders during the same period totaled 13,272 thousand gross tons, down 64.4%. As weak orders accelerated the decline in shipyards' order backlogs in Japan, South Korea, and China, major South Korean shipyards suffering from intensified competition for orders and falling vessel prices began selling or idling construction docks because of insufficient work. A series of privately owned shipyards in China went bankrupt, and industry consolidation, restructuring, and淘汰 are expected to accelerate, including in Japan, where conditions are difficult because of the stronger yen.」

「Global newbuilding orders during the same period totaled 6,759 thousand gross tons, down 56.9% year on year. Under these difficult conditions, shipyards in Japan, China, and South Korea are being forced into intense competition to capture the limited available demand,」

「In China, the reported bankruptcies of listed shipbuilding companies, and in South Korea, moves to restructure or merge major shipyards for government support, among other developments, reflect the intense survival competition facing shipyards in Japan and overseas.」