Clarksons: Ammonia-ready at 10.8 pct as alternative fuel orders hit new heights
The majority of the newbuilding tonnage ordered in 2022 was alternatively fuelled, according to the data from Clarksons Research.
Insights from the shipbroker show that 61% of tonnage ordered last year (35% by number) was alternatively fuelled. Overall, 83.4 million dwt was ordered across vessel sectors in 2022, down by 39 percent when compared to 137.5 million in 2021.
“While global newbuild order volumes fell (20% y-o-y in CGT terms), 2022 was still an active year for the global shipbuilding industry with higher pricing (up 15% on average), more complex ships ordered (e.g. a record 182 LNG orders of $39bn) and alternative fuel investment increasing (a record 61% of tonnage ordered) all supporting a 6% increase in value of orders to $124.3bn,” Steve Gordon, Managing Director of Clarksons Research said.
Over half of tonnage ordered (397 orders, 36.7m GT) was LNG dual fuel, 7.0% was methanol (43 orders, 5.0m GT), 1.1% LPG (17 orders, 0.8m GT) and 1.2% included battery hybrid. 10.8% of orders were ammonia “ready” (90 orders, 7.7m GT), 1.4% of orders were LNG “ready” (31 orders), 0.1% were hydrogen “ready” and 22 orders were methanol “ready”.
Ordering in 2022 was dominated by LNG (record 182 vessels, 36% CGT), container (350 vessels, 29% CGT down 50% y-o-y but still the third largest on record basis TEU) and Car Carrier (69 vessels, 2.4 CGT) vessels. FPSO and “wind” niches also did well. Despite improving charter markets, tanker orders fell 64% while bulkers dropped 54%. Increased tanker orders seem likely for 2023, along with a continued flow of LNG.
China (49%) and South Korea (38%) took the “lions share” of orders and Japanese orders fell by nearly 50%. Overall shipbuilding output fell by 8% (China 47% of output, S. Korea 25%, Japan 16%). European output has stabilised at 2.5m CGT and 8% of global market share helped by cruise deliveries.
“We are projecting that output will start to tick up (by ~6% in 2023), become increasing dominated by container and LNG (41% of 2023 scheduled deliveries, rising to 58% in 2024) and that South Korean output share will tick upwards. From an owner perspective, China ($18.4bn), Japan ($15.1bn) and Italy ($11bn) contributed 36% of investment but Greek owners “kept their powder dry” (“only” $8.5 bn),” Gordon said.
With only 131 “large” active yards (2009: 320), Clarksons estimates shipbuilding capacity is ~40% lower than a decade ago.
Only moderate or marginal capacity increases at individual yards are expected in the medium term. As disclosed, shipyard forward orderbook cover has edged up to 3.5 years from 2.5 years in 2020 and prices increased 5% across 2022 (LNG: 18%) but were 15% higher on average in 2022 compared to 2021.
“Although long-term trends point to increasing fleet renewal, as besides emissions reduction, fleet age is increasing, 2023 will have its marketing challenges for yards: macro-economic risk is material and may weigh on investor sentiment, alternative fuel choices remains tricky and newbuild prices and berth availability are a hurdle for some owners,” Gordon said.
“But there are ‘mitigating’ factors for shipping and the product mix is likely to change: the container market will be weaker (although don’t rule out orders, possibly in feeders) but tankers and bulkers have historically low orderbooks (4% and 6% of fleet). Along with currency and inflation, perhaps with some easing, yards will need to be as agile as ever.”