The global shipbuilding paradigm has changed dramatically in the space of just 24 hours. Bluechip owners wanting their VLCCs or mega boxships built at South Korea’s top trio of yards will find their negotiating position will harden in the days and weeks to come following yesterday’s record-breaking $19.2bn ship ordering news from Qatar.
Qatar Petroleum has reserved up to 100 LNG carrier slots at Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries and Samsung Heavy Industries through to 2027 – the largest shipbuilding agreement in history, dwarfing the 45 Q-Flexes and Q-Maxes the Koreans built for the same clients from 2004 to 2007. Yesterday’s dock reservation agreement comes just weeks after Qatar Petroleum booked 16 slots at China’s Hudong-Zhonghua.
Newbuild price indices – on a downward slope all year – will strengthen for larger tankers and boxships as berth availability at the world’s most sought-after yards has suddenly tightened by more than 10% overnight.
While ordering is likely to remain muted this year – and Korea’s big three will struggle to meet their ambitious annual sales goals – their hand has definitely been strengthened, just like it was back in 2004.
Another takeaway from the Qatari decision is that it heralds the final nail in the coffin – or rivet in the steel plate – for Japanese LNG carrier exports. Once the world leaders in this high-tech sector, the Japanese dogged determination to stick with spherical Moss-type gas carriers while the Koreans went for ever larger membrane types ushered in the changing of the guard in this most expensive of ship segments.
It is also another step down the ‘Valemax’ path; the industrialisation – and jumboisation – of gas shipping supply chains. Alarm bells ought to be ringing among owners of the 50-odd newbuilds currently under construction that have been ordered with no fixed long-term contracts.