Martin Stopford, Non-Executive President of Clarksons Research Services recently stated that in 2016 shipyards have thus far experienced the lowest newbuilding orders since the 1980’s.
He made the remarks whilst sat on a panel of highly reputed experts during an advance press conference to give the shipping trade press insight into SMM Hamburg 2016.
In his keynote address at the press conference, Stopford stated that despite a 20 percent capacity reduction and closure of over 500 shipyards, ordering levels for new ships are well below world capacity. Therefore, shipyards and equipment manufacturers face a challenging year.
In 2009 there were 992 shipyards whereas in 2016 only 423 shipyards remain that are currently operating about 100 million DWT capacity which Stopford says: “for shipyards is effectively slow steaming.”
He also highlighted the fact that underlying demand isn’t enough to support this 100 million DWT capacity. Average demand has in fact been 65 million DWT per annum.
It is not a very good scenario and there is not a lot of money about, stated Stopford. But he did praise the fact that at long last ship owners have stopped ordering ships.
When addressing how the shipbuilders are coping under current market conditions, Stopford reflected on how new players enter into the market during recessions and that Chinese shipyards have grown the fastest in recent years. Chinese shipyards are only set to get bigger and stronger, Stopford stating that China may come out as the “top shipbuilding dog” in ten years’ time.
The economics expert made the concluding statement that shipyards have been very active in adjusting capacity but the bottom line is that “they haven’t done enough yet”.
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