Due to the decline of new ship orders and the rise of shipyard delivery, the number of hand-held orders continued to shrink in 2019, to the lowest level in the past 15 years. At the same time, as the shipbuilding industry continues to integrate and the shipping industry promotes emission reduction, the number of shipyards continues to decrease and LNG power ship orders increase significantly, the global shipbuilding industry will face great opportunities and challenges in the future.
Clarkson recently released a review report on the shipbuilding market in 2019. The report shows that global shipyard deliveries have increased in 2019 after a sustained decline in production over the past three years. However, orders for new ships, which have continued to rebound since 2016, have declined.
Clarkson pointed out that due to the decrease of delayed delivery and the strong growth of delivery volume of Korean shipyards, the global shipyard delivery volume in 2019 increased by 6% year-on-year to 32.8 million CGT (22% year-on-year growth in terms of DWT). However, such delivery level is still about 40% lower than the peak figure in 2010, and Clarkson currently predicts that global shipyard delivery will fall back to similar level in 2018 again in 2020.
In contrast to deliveries, global orders for new ships fell by about 30% in 2019. Among them, bulk and container ship orders fell by about 50%. However, the order volume of LNG ships remains stable. There are 61 LNG ship orders in the whole year, with a total value of about US $10.7 billion. It is expected that large-scale LNG ship orders will also come in 2020. New orders for cruise ships ($18.8 billion), LPG vessels ($3.4 billion), and FPSOs increased year on year.
Affected by this, the global hand-held orders at the beginning of 2020 reached 188 million dwt, the lowest level since 2004, down 17% compared with the same period last year and 65% compared with the beginning of 2010. At present, the proportion of global handheld orders in the current fleet is about 9%. Generally speaking, such a low proportion of hand-held orders and the improvement of income environment will lead to the increase of orders. However, Clarkson also pointed out that the uncertainty of environmental technology, the choice of fuel and the risk of early users continue to restrain the order growth.
In 2019, China's ship delivery volume continues to lead the world, accounting for 34% of the total global delivery volume, followed by South Korea (29%) and Japan (25%). South Korean shipping companies ranked first in terms of order receiving volume for two consecutive years. The annual order receiving volume reached 9.4 million CGT and 22.3 billion US dollars, occupying a leading position in the LNG ship and crude oil ship market. With the expansion of the market share of large container ships and the continuous dominant position of bulk cargo ship market, Chinese shipping enterprises have narrowed the gap of order receiving volume with Korean shipping enterprises. European shipping companies have increased orders and deliveries, and their position in the cruise industry has been further consolidated, accounting for more than 90% of the global cruise market.
Over the past year, the trend of global shipbuilding industry integration has continued, with 70 shipyards receiving orders for ships with a capacity of more than 20000 DWT, down from 85 in 2018. China shipbuilding group and CSIC have merged to establish the world's largest shipbuilding group, China shipbuilding group, which holds 15% of the global total orders (calculated by CGT).
Except for LNG ships and VLCC, most ship price indexes are basically flat or showing a downward trend. It is worth mentioning that more and more shipowners choose to order LNG powered ships. In the whole year of 2019, about 30% of new ship orders use LNG power. Excluding LNG ship orders, this is about 17%, compared with a 25% increase in new ship orders in December. In the past year, VLCC (big ship group), Suez oil tanker (Guangzhou shipbuilding International), Cape of good hope bulk carrier (modern heavy industry) and Newcastle Max bulk carrier (Waigaoqiao Shipbuilding) have all received the first batch of LNG powered dual fuel ship orders.
Clarkson predicts that by 2020, fuel options, and accelerated environmental agendas will focus on low carbon emissions and related technologies, which may control many new shipbuilding negotiations. With the shipping industry committed to decarbonization, shipyards will face great challenges and opportunities in the next 10 years.