A spate of orders from Taiwan is pushing the container orderbook-to-fleet ratio back to above 15% territory again.
Citing Evergreen and Yang Ming’s recently announced 20-ship each expansion plans, analysts at Alphaliner report that the total containership orderbook is now more than 2.8m teu, or 13.2% of the existing fleet in slot capacity terms.
The orderbook-to-fleet ratio had fallen to only 12.4% in August last year – an all-time low.
“This downward trend now looks set to be reversed as carriers eye fresh fleet renewal programs for 2020, when new SOx and ballast water management rules are due to come into effect,” Alphaliner noted in its most recent weekly report, going on to mention a likely impending giant order, covered already by Splash, from South Korea’s Hyundai Merchant Marine (HMM).
A recent report from consultants McKinsey warned that overcapacity in the liner trades is here to stay. McKinsey stated the current supply of container capacity afloat is about 20% greater than demand.
Another report published this week from S&P Global Ratings was bearish on liner prospects for 2018, largely thanks to the swathe of new ships under construction at yards across Asia. For container shipping, S&P was concerned at liners’ continued poor supply discipline with new orders likely leading to flat, or even slightly depressed rates for this year.
Meanwhile, the idle fleet has in recent days fallen below 1%, with Alphaliner reporting a sharp drop in the past fortnight as carriers rushed to add capacity to take advantage of the high pre-Lunar New Year holiday demand in East Asia.