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Sunday, April 23, 2017

Global Deliveries Sending Out Mixed Signals

April 21, 2017

Graph: Clarkson Research Services Limited

Graph: Clarkson Research Services Limited

 Despite the shipbuilding industry being under great pressure, global deliveries have exhibited some resilience and increased in 2015 and 2016 in dwt terms, says a report by Clarksons Research.

 
However, due to the multi-cyclical nature of shipping, delivery levels varied greatly by vessel sector. Furthermore, delivery volumes would have been higher had it not been for ‘non-delivery’ of vessels on order reaching a record level.
 
There were a reported 1,665 vessels of a combined 94.5m dwt delivered in 2016, a 4% increase in dwt terms, although deliveries fell by 9% and 6% in numerical and CGT terms respectively. Tanker deliveries increased by 4% in 2016 and reached their highest annual level since 2013 in dwt terms.
 
In particular, tanker deliveries by Korean yards increased by 23% year-on-year and accounted for 36% of global tanker deliveries in 2016. In the gas carrier sector, overall deliveries increased by 18% in cu.m. terms and reached the second highest annual delivery volume on record. Meanwhile in the cruise and passenger ferry sectors, deliveries increased by 55% year-on-year in GT terms.
 
Amidst particularly challenging conditions in the bulkcarrier sector, bulker delivery volumes decreased by 4% in 2016 in dwt terms and reached their lowest yearly level since 2009. This was driven by a 9% decrease in bulker tonnage delivered from both Chinese and Japanese yards. 
 
Deliveries in the containership sector decreased by an even larger amount, 46% in TEU terms, to the lowest annual level since 2004, with particularly large declines of 58% and 41% at Chinese and Korean yards respectively.
 
Between 2013 and 2016, the average yearly delivery volume was 99.3m dwt. Comparing to historical delivery levels, this total is almost identical to the 98.7m dwt average annual delivery level between 2007 and 2009. However, it is 37% lower than the 158.4m dwt average delivered per year between 2010 and 2012. In particular, average annual delivery by Chinese yards decreased from 67.3m dwt between 2010-2012 to 39.2m dwt between 2013 and 2016.
 
Delivery volumes would have risen by an even greater proportion year-on-year had it not been for the record level of ‘non-delivery’ last year. Non-delivery, measured here as the difference between start year scheduled deliveries and actual deliveries in the full year, reached 41% in 2016. 
 
This was particularly high in the bulkcarrier sector, where non-delivery reached 49% last year, with vessel deliveries subject to further deferrals. The majority of non-delivery can be attributed to record levels of slippage, while cancellation fell slightly to 6%.
 
So, delivery volumes were mixed in 2016, increasing in the tanker and gas carrier sectors and decreasing for bulkers and boxships. ‘Non-delivery’ reached record levels, especially in the bulkcarrier sector. However, after two years of gradual increases, with the orderbook falling in size and having reached its lowest level since March 2004 in dwt terms, deliveries appear unlikely to increase again this year.
 
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