Shipbuilding Orders Continue to Build Towards a Record Year

shipbuilding orders continue to set records in 2021
For the first time in eight years, South Korea's major shipbuilders are meeting their annual order targets (file photo)

Published Sep 29, 2021 5:28 PM by The Maritime Executive

As the third quarter comes to a close, the turnaround for the shipbuilding industry in 2021 continues to set records, exceeding forecasts after years of slow performance. With three months remaining in the year, the industry remains optimistic that 2021 will provide years of work for shipbuilders.

With new orders appearing on a weekly basis for containerships, Clarkson Research is now reporting that the total global volume of new orders for containerships based on gross tonnage is the largest since the agency started tallying the market in 1996. The volume is reported to be about 12 times the total volume of new orders placed during the first three quarters of 2020. Further, the orders have now exceeded the last boom cycle in 2007.

While the increase in the size of vessel accounts for some of the records, measured in TEU capacity the sector is also on track for multiple records in 2021. As of the end of August, industry trade association BIMCO was already reporting that containership orders were approaching 5.3 million TEU and in the last month advanced at least another 300,000 TEU. BICO calculated the all-time high at 6.8 million TEU that were on order at the end of July 2008.

Other segments of the shipping industry are also moving forward with an increased number of new orders. China and South Korea are the largest recipients of these orders with both countries reporting strong results at the end of the third calendar quarter of the year.

South Korea’s three large shipbuilding companies have each reported that they have now achieved or exceeded their annual order targets. South Korea’s Pulse news outlet reports that it is the first time since 2013 that the country’s three major shipbuilders have all met their yearly goals.

Tallying the orderbooks, Pulse reported that Korea Shipbuilding & Offshore Engineering has surpassed its annual target of $14.9 billion by 30 percent with orders currently valued at $19.4 billion to build 201 vessels. The orders range from LNG carriers to containerships, very large crude carriers, LPG carriers, and petrochemical carriers. Daewoo Shipbuilding & Marine Engineering’s orders now stand at $8 billion for 46 vessels, surpassing the yearly target of $7.7 billion. Samsung Heavy Industries’ orders total $7.8 billion or 86 percent of its annual target of $9.1 billion. The company is expected to officially exceed its target as it completes a contract reported to be valued at more than $2.6 billion with Russia’s Novatek.

China’s shipbuilding industry is also reporting strong growth in 2021. The China Association of the National Shipbuilding Industry (CANSI), reported that new orders are up more than 200 percent on a tonnage basis in 2021. China reports that the total order book is up by more than a quarter standing at over 91 million dwt. Nearly 90 percent of the orders are for export to the international market and the strong growth in orders in 2021 has helped China to maintain its overall 50 percent share of the global shipbuilding industry.