Newbuild Orders Hit Record Low

Sharp Year-on-year Declines Reported

Newbuilds orders reached a record low last quarter, according to figures from research analyst firm VesselsValue.

The data, based on received orders from shipyards globally, points to weak market demand and suggests a further tightening in capacity as older vessels near end-of-life and are not replaced by newer ships.

“Newbuilding orders dropped to record lows in second quarter of 2019,” said Olivia Watkins, head cargo analyst at VesselsValue.

Offshore Stalls

Of the various sectors affected by this slowdown, offshore newbuilds were among the worst hit with only one confirmed order placed in the first six months of 2019. An order from UK company High Speed Transfers for a FSV/Crew Boat on Jan. 22 has been the only investment so far this year.

“When considered against the same period in 2018, where newbuild contracts were placed for six OSVs, one OCV and one MODU, the market has been quiet for some time,” Watkins notes.

Tightening budgets and improved efficiency from offshore oil and gas exploration firms is believed to be one factor in the slowdown, as cost savings have filtered down to breakbulk specialists serving the sector.

“In order to survive the oil price crash and subsequent downturn in the offshore markets, the industry has instead seen many vessels being sold for scrap and owners consolidating, which has led to many companies streamlining their fleets in order to reduce their operational costs,” Watkins adds.

Bulker Orders Fall

Alongside weak performance in the offshore sector, VesselsValue also reports that the total number of bulker newbuild orders was down 73 percent for the first half of 2019. The firm notes that Panamaxes were the most popular size to order, followed by the Capesize sector which received 13 orders from COSCO Bulk.

Headquartered in London, VesselsValue also operates offices in the Isle of Wight, Stoke on Trent, Singapore and South Korea. The firm provides market valuation services and consultancy for the maritime sector and is partnered with Seasure Shipbroking.