Boxships dominate newbuilding contracting

Flush with cash, boxship owners are heading for a record year of ordering activity

News ID: 80546

Date: 30 May 2021 - 12:10

Orders across all sectors in the first five months of the year are only just behind the full-year total for 2020. Large containerships are responsible for most of the increase.

CONTAINERSHIPS have been responsible for the lion’s share of the 120% rise in ordering activity compared with the first five months of the past year.

According to data from BIMCO, total orders year to date are up 119.7% on 2020 figures, primarily driven by boxship contracting as owners and operators “flush with cash” head to the yards.

The 43.6m dwt ordered in the first five months of this year is only just behind the 49m dwt ordered in the whole of 2020, as the pandemic brought uncertainty to buying decisions.

“The vast amount of money pouring into container shipping is finding its way into the shipyards, with the current tightness in the supply of ships incentivising some owners to expand their fleets,” said BIMCO chief shipping analyst Peter Sand.

A record-breaking 2.2m teu had been added to the boxship orderbook since the start of the year, more than 12 times that added in the corresponding period in the past year and 60% higher than the previous record in 2005.

But is was not  just ultra-large tonnage that was dominating orders. The most popular boxship tonnage in terms of capacity and number of vessels ordered had been in the 15,000 teu range.

“The biggest of the ultra-large carriers are proving less popular, with carriers seeing the 15,000 teu-16,000 teu ships as a better option,” Mr Sand said.

“This is because they still offer solid savings from economies of scale while not putting the same limits on flexibility as the 20,000+ teu ships have in terms of trading patterns.”

While 89 ships of more than 15,000 teu had been ordered, with an average capacity of 16,622 teu, this masked the fact that there was nothing ordered between 16,000 teu and 23,000 teu, he added.

There also appeared to be a polarisation between ships of 15,000 teu-16,000 teu, of which there were 75 on order, and the 14 orders for vessels more than 24,000 teu.

The vast majority of the tonnage ordered so far this year will be delivered in 2023, which BIMCO estimates will see 1.5m teu delivered.

This would make it the busiest year for containership deliveries since 2015.

In other sectors, crude tanker demand was up by 47%, but demand for product tankers had fallen and dry bulk contracting was only slightly above last year’s levels.

“Although also making good money in the current market, dry bulk owners have been more reluctant to order new tonnage, with the second-hand market proving more popular,” Mr Sand said.

“The tanker market is split in two. We are seeing a rise in contracting for crude oil tankers, as owners who filled their coffers during the height of the market last year are betting on a better market when the ships are delivered, whereas oil product tankers are proving less popular.”