A report from Canada’s Teekay Corporation published earlier this month sees global shipbuilding capacity falling by 20-30% over the next five years.
The tanker giant predicted many smaller yards will fold, larger ones will reduce capacity and there will be plenty of shipbuilding consolidation in the coming years.
“For global shipping markets, a reduction in shipyard capacity should be seen as a positive as it reduces the risk of a perpetually over-supplied market. In the short-term there could be further benefits, as the potential failure of certain shipyards could lead to order cancellations and therefore reduced fleet growth. This would be a welcome relief for those shipping sectors currently drowning in a sea of oversupply,” the listed company noted.
Teekay statistics show that just 7.2m cgt of new orders were placed in the first eight months, by far the lowest year for new orders since at least the early 1990s.
“The problem for the yards is that global shipbuilding capacity is far higher than it was in the past, at approximately 50m cgt per year versus 15-20m cgt per year in the 1990s,” Teekay warned.
Teekay estimates major shipyards have only filled 60% of total capacity for 2018 delivery with 25% booked for 2019.
Teekay’s estimates correspond with recent pronouncements from Dr Martin Stopford, president of Clarksons Research, who believes global shipbuilding capacity at present is 30% above demand.