Green shoots in newbuilding market?

There is a growing awareness in the shipbuilding industry that a closing of the gap between newbuilding and second-hand ship prices is occurring which is making the newbuilding market a more attractive proposition.

An escalation of unconventional opportunities is also starting to help the market, the world’s largest shipbroker Clarkson says. Newbuilding orders slumped by more than 90% in the first half of 2009 following the onset of the global financial crisis when less than 300 vessels were ordered in the first six months to June 2009, against nearly 2,500 in the corresponding period of 2008. However, Clarkson claims in its latest report that market conditions are beginning to shift and restore interest in ordering new ships.

Financing remains difficult and many shipowners are sticking to their wait-and-see approach, the shipbroker says. However, unusual openings such as direct shipyard re-sales and distressed deals are also bringing buyers’ appetites back. “This is starting to create momentum in the market,” Clarkson said.