Danish Ship Finance Global Shipbuilding Market Forecast

Shipyards’ order cover continues to decline as more tonnage is being delivered than contracted. 28 million cgt was contracted during 2011 while 50 million cgt left the shipyards. 74 million cgt was scheduled for delivery in 2011 but, according to Danish Ship Finance estimates, global yard capacity was not able to build more than 63 million cgt in 2011.

Global yard capacity was utilized 80% in 2011, down 3 %-points from 2010. For 2012 and beyond, Danish Ship Finance (Skibskredit) expects pressure on yard capacity and yard utilization. South Korean yards seem best positioned to adapt to the difficult outlook. After extensive postponement activity, the spare capacity at global yards amount to 44 million cgt in 2014 if current yard capacity is maintained.

In 2011, newbuilding prices fell on average 10% and are 40% below the 2008 peak-level. Time will tell whether newbuilding prices will decline in tandem with lower yard utilization or not.

[mappress]

Source: skibskredit, March 23, 2012;