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The Shipbuilding market
in 2000

The orderbook   Analysis by country:
The prices Asia  - Europe  - America 


The year 2000 was highlighted by:

1. An extremely significant growth, of almost 60%, in the level of newbuilding compared to 1999. More than 46 million gt were ordered in 2000 against about 29 million gt in 1999. This increased demand was for all types of vessels and was particularly evident in the tanker, container and dry bulk (Handysize / HandyMax) sectors.

2. The saturation of newbuilding capacity. Growth in demand resulted in the global orderbook reaching historical high levels, advancing about 25 % and passing the 58.9 million gt figure at the end of 1999 to reach 71.1 million gt by the end of 2000. The orderbook by the middle of 2000 was full with deliveries through to mid 2003. The shipyards became more selective, refusing to quote for later deliveries and selling their remaining open berths at more expensive prices.

3. The rise in newbuilding prices for most types of vessels for the first time since the beginning of the nineties was about 10 % to 25 %. This price increase however was not universal and depended on both the size and type of vessel as well as the amount of competition between the shipyards. The price rises were most significant for tankers and containerships and less pronounced for bulk carriers.

4. The exceptional performance of Korean shipbuilders who collectively took orders for about 21 million gt, almost half of the total orders placed world-wide in 2000. This brought the Korean orderbook up to 30 millions gt. (a figure in excess of the entire global orderbook of 1989). Japan also achieved significant results, taking orders for almost 14 million gt, keeping their orderbook at about 18 million gt, but its market share decreased.

5. The conflict between the European Union shipbuilders and their Korean counterparts took on a new dimension as the Association of West European Shipbuilders decided to bring the dispute to the highest political level of the European Union, which in turn threatens to bring the dispute before the World Trade Organisation.

The year 2000 was characterised in economic terms as an exceptional year. Growth on a global basis was much stronger than 1999 and was spread over all three of the world�s main economic zones.

The expansion of world trade increased from 5 % in 1999 to 10 % in 2000 against an average growth rate during the nineties of 6 %-6.5 %.

Freight rates in the three main marine transport sectors experienced substantial increases, tripling for tankers in the case of crude oil trades, with a strong increase in rates for refined petroleum products, dry bulk cargoes and container shipping not far behind. Freight rates in the petroleum sector were powered by not only the increased demand for crude oil, but also by the emergence of restrictive chartering policies in regard to vessel age instituted by oil companies in the aftermath of the �Erika� disaster. Tankers chartered by oil majors must meet ever stricter quality requirements. Over-aged tankers are no longer considered by oil majors.


The orderbook


The continued low level of newbuilding prices in combination with the significant improvement of freight rates has led many owners to order newbuildings.

Moreover, the price of modern vessels on the second-hand market also encouraged the trend towards newbuilding investment. First, these vessels had been ordered at higher prices. Secondly, owners of quality tonnage were not willing to sell without a premium in a market paying charter rates at historical highs.

The dynamics has resulted in a flood of orders and has almost saturated the global shipbuilding capacity.

The quickening pace of ordering world-wide benefited primarily to shipbuilders in Korea and also to those in China and in Eastern Europe. Of the almost 14 million gt added to the world orderbook, about 7.9 million gt were taken by Korean shipyards, which held more than 40 % of the world orderbook, Eastern Europe followed with 1.4 million gt and China with 1.0 million gt. The second half of the year was more favourable to the European Union and Japanese shipyards but their market share contracted.

In the past, construction cycles for tankers and bulkers were fairly regular, with alternating periods of dominance by one while the other retreated. The year 2000 saw not only the unusual concurrence of demand for both but also the addition of simultaneous demand of equal intensity in the containership sector.

Shipping and Shipbuilding Markets in 2000


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