Over-tonnaging and large operating inefficiencies mask the true levels of fleet under-utilisation and are hindering a recovery. With the orderbook dominated by bulk carriers and containerships, two of the worst hit markets in terms of oversupply wreaking havoc with rates, it reflects the fact that for some time now ordering activity by shipowners has exceed the requirements of trade growth.
To give a clear insight into the prospects for the shipbuilding industry, Drewry's World Shipbuilding Annual Review and Forecast report presents three scenarios covering the projected newbuilding requirement by sector and ship type over a 15-year period, reflecting the uncertainty that surrounds the industry.
Only under the High Case scenario is there a requirement for further new ordering beyond the size of orderbook at the start of 2012. Whereas under the more realistic Base Case in virtually all fleet sectors the size of the orderbook at the start of 2012 more than exceeded the newbuilding requirement to 2016.
The immediate prospects for the shipbuilding industry are therefore bleak. Furthermore, access to funding - either through retained reserves or debt is very limited for shipowners and in the circumstances it seems almost inevitable that new ordering levels will remain low for some time to come.
Simply, the difference between forecast demand and capacity is too great to be bridged by contraction from isolated capacity closure, meaning shipyards will have to fight for survival by securing enough of the limited new ordering that is likely to take place in the next couple of years, according to Drewry.
The World Shipbuilding Market Annual Review and Forecast - 2012/13 is published by Drewry Maritime Research and is priced at Â£1395 ($2,237).
Source: Drewry Maritime Research
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