Shipbuilding orders, secondhand vessel deals surge as prices climb

Global new vessel orders have more than doubled from a year earlier, with prices for both new and secondhand ships continuing to rise. The surge reflects a confluence of geopolitical risks and a shortage of dry-dock capacity at shipyards worldwide, driving shipowners to secure vessels in large numbers. The strong order flow and rising ship prices are expected to benefit South Korean shipbuilders, which have been pursuing a selective ordering strategy focused on high-value vessels.

Cumulative global new vessel orders reached 2,098 ships through the fourth week of August — week 35 of the year — up more than double from 938 ships in the same period last year, according to Clarkson Research, a London-based shipping and shipbuilding market intelligence firm. In week 35 alone, 107 vessels were ordered, including 17 oil tankers, 32 chemical and specialty ships, four liquefied petroleum gas carriers, two LNG carriers, one dry bulk carrier and 12 container ships.

The momentum in the new vessel market extended to secondhand ship transactions. Cumulative secondhand vessel deals over the same period reached 1,555 ships, up more than 300 from 1,239 in the year-earlier period. Week 35 saw 32 secondhand vessels change hands, maintaining the brisk pace.

Ship price indexes have also been climbing on the back of surging demand. The new vessel price index rose 0.09 points from the previous week to 186.34 in week 35. Among individual vessel types, the price of a 91,000-cubic-meter LPG carrier rose $500,000 to $114.5 million, while a 6,500-CEU car carrier — where one CEU represents space for one vehicle — gained the same amount to reach $93 million. Smaller vessel categories also advanced, with Panamax bulk carriers up $250,000 to $38.5 million and Handymax bulk carriers up $250,000 to $35.5 million.

The secondhand market also saw prices jump, driven in part by strong demand for vessels available for immediate deployment. The resale price of a petrochemical product tanker — a vessel sold while still under construction — surged $1 million from the previous week to $59 million. Secondhand prices for bulk carriers and container ships held steady near recent highs.

The global surge in vessel orders and rising ship prices are expected to further strengthen the profitability of South Korean shipbuilders. Major domestic yards, which have already secured more than three years' worth of orders, have been selectively taking on high-value, high-margin vessels rather than competing aggressively on volume. As total order volumes grow, shipyards gain greater pricing leverage, creating conditions in which they can command higher prices.

Rising secondhand and resale prices also create a virtuous cycle that sustains upward pressure on new vessel prices. With dry-dock capacity saturated and delivery lead times lengthening, shipowners are compelled to place new orders quickly even at elevated prices when secondhand alternatives are also expensive. "The dynamic in which rising secondhand prices push up new vessel prices will provide long-term support for higher order prices and improving earnings at Korean shipbuilders," an industry official said.