Shipbuilding industry has entered a new round of rapid development

First, the world shipbuilding industry has opened a new round of industrial cycle

The international ship market is characterized by periodicity, and the factors affecting its periodicity are many and complex. The cyclical fluctuation of the world economy is an important external factor affecting the cycle of the ship market. The renewal and reinvestment cycle of ships of around 25 years is the main intrinsic factor.

Looking at the century-old history of the global shipbuilding industry, the excessive prosperity or depression of the world economy, the great changes in international maritime rules, large-scale wars and other factors will lengthen or shorten the ship market cycle. This is also the main reason for the confusing length of the ship market cycles over the past 100 years. The destruction of ship assets in the Second World War resulted in a new shipbuilding market cycle of less than 15 years; The single-hull tanker phase-out Convention adopted by IMO in 2003 and the rapid economic development of China are superimposed, which will extend the cycle of the new shipbuilding market to more than 30 years.

Since the financial crisis, the shipping and new shipbuilding markets have experienced more than 10 years of adjustment, the time span is close to half a full cycle. Today, a new round of new shipbuilding market upcycle has quietly opened.

First, the global shipping market capacity clearance has basically ended.

In the past ten years, the major ship types have gone through 1-2 rounds of large-scale capacity dismantling and large-scale bankruptcy reorganization of shipowners, the fleet growth rate has declined for seven consecutive years, and began to rebound in 2019, and the significant correction of sea traffic in 2020 has not only not formed a huge blow to the shipping industry, but has led to a significant rebound in global sea traffic and a substantial increase in freight in 2021. The BDI index, which reflects the ups and downs of the shipping market, broke through a decade-long pressure point of 3,000 points, indicating that the shipping market has emerged from the quagmire of excess capacity.

Second, the new shipbuilding market has clearly bottomed out.

At the beginning of the new century, the global shipping volume was about 6.5 billion tons, corresponding to about 50 million deadweight tons of new ships. At present, the world's maritime traffic has reached 12 billion tons, and under normal circumstances, the volume of new ships corresponding to this volume is about 90 million deadweight tons.

In the market capacity clearance stage, the volume of new shipbuilding market in 2016 was only 30 million deadweight tons; In 2017-2018, it basically recovered to the normal level of 90 million deadweight tons; Even in 2020, when the epidemic situation was the most severe and the market outlook was the most bleak, new ship transactions still reached 60 million DWT.

This shows that the new shipbuilding market has bottomed out in 2016, suffered a brief correction in 2020, and if there are no major adverse factors in the future, the annual new ship turnover can remain above 90 million deadweight tons.

Third, the international maritime Convention will accelerate the recovery of the new ship market.

In recent years, IMO legislation on environmental protection has gradually accelerated, and relevant conventions such as ballast water and sulfur discharge have come into force one after another. Under the framework of the greenhouse gas emission reduction strategy, more new requirements such as EEXI and CII will be introduced one after another.

In 2023, EEXI and CII will be officially implemented, and the final installation deadline of ballast water treatment system is September 2024, old ships need to install a variety of devices, but it is difficult to recover the investment and choose to replace; Mid-age ships need to reduce the power and speed of the main engine, thereby reducing the market capacity. New ships are rapidly shifting to alternative energy.

All these will accelerate the pace of recovery in the new shipbuilding market and promote the further increase of new ship transactions on the basis of 90 million deadweight tons.

Fourth, the capacity adjustment of the shipbuilding industry is nearing an end.

Since the financial crisis, hundreds of cases of bankruptcy liquidation and merger and reorganization of global shipbuilding enterprises have been affected by factors such as the sharp decline in orders and the continuous decline in ship prices. Among them, from 2012 to 2016, the capacity adjustment of the shipbuilding industry was mainly based on shutdown, bankruptcy and liquidation, and gradually spread from small and medium-sized enterprises to large shipbuilding enterprises; From 2016 to 2020, the adjustment of the shipbuilding industry will shift to mergers and acquisitions between large and medium-sized enterprises, including the acquisition of high-quality shipyard assets by advantageous enterprises and the merger and reorganization of large enterprise groups.

After the above two rounds of capacity adjustment, under the role of the market, the number of active monoshipyard with orders or delivery records of ships over 10,000 tons in the world decreased from 440 to about 180 in 2016, and remained basically stable; In 2020, affected by the epidemic and the market correction, the number of shipyards receiving orders or delivering ships fell to about 150. In the past three years, although the operation of shipbuilding enterprises is still difficult, the economic operation of major shipbuilding enterprises in China, Japan and South Korea is generally stable, and the production capacity clearance process has basically ended.