Market uncertainty and demand disruptions following the coronavirus outbreak has caused a major drop in global newbuilding orders, according to Danish Shipping.
Namely, the current order book globally, for newly built merchant ships, has never been as empty, not since 1989.
Specifically, the global number of newbuilding vessels on order measured in gross tonnage has fallen 41% since 2015, and the orderbook as a percentage of the existing global fleet ratio is 7.1%, the lowest since 1989.
So far only 26.5 million dwt has been ordered this year, and thereby the full year total could be close to the level seen in 2016, where the contract level was at 30 million dwt.
The Danish shipping companies have also kept up with the orders, and have orders for 45% fewer ships in October this year than at the same time last year. At present, 51 vessels corresponding to DKK 1.5 million have been ordered.
A shipbuilding boom was seen in the 2000s, but record high ordering levels ended at the onset of the global financial crisis, with an orderbook ratio (orderbook / existing fleet) at more than 52% in 2009.
Even though we love new ships, it is good news that no more new ships have been ordered than the analysis shows. If too many new ships enter an already pressured market, it forces freight rates down, and we are obviously not interested in that
states Jacob K. Clasen, Deputy CEO of Danske Rederier.
According to Danish Shipping, the reluctance to order new ships provides a better starting point for coping faster through the COVID-19 crisis than the financial crisis. In 2009, the global order book peaked with orders for new ships corresponding to 52% of the then global fleet.
