Recovery could take 3 to 4 years

It would take three to four years for commercial ship newbuilding orders to pick up again, according to a securities house’s forecast. Daishin Securities said newbuilding recovery would need two additional years even after the global economic downturn ends as the massive newbuildings on order should be absorbed into market.

It also forecast that deep-sea drillship orders would not be seen placed in near future as many existing such ships have not secured charter contracts yet although large shipbuilders could receive new orders in the second half from Shell’s LNG-FPSO and Gorgon LNG projects.

Further, Daishin said that ship financing market would continue to be subdued for a while as global shipping rates recovery is unlikely to come in near term. Daishin analyst Jeon Jae-cheon said, “Although market prospect is not bright, offshore plant orders are expected to be placed in the second half.”