Global shipbuilding orders reached 226.1 million gross tons (cgt) in October, surpassing the previous record of 225.5 million tons cgt in September 2008. This significant increase amounts to an approximate value of $700 billion and reflects a 24 percent growth from last year and a threefold increase compared to 2020.
Production Growth in Coming Years
Production in the shipbuilding industry has only recently begun to ramp up. It is projected that by 2027, 64 million tons cgt will be delivered to the market, which is 24 percent higher than this year's estimated production and 18 percent above the previous record of 55 million tons cgt in 2010. This figure may reach 72 million tons cgt by 2028, which would be 60 percent higher than the production level in 2025.
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Change in Fleet Composition and China's Dominance
Despite similarities to 2008, today's market is very different. The current order backlog constitutes only 25 percent of the existing fleet by gross tonnage, compared to 53 percent in 2005. Specifically, the composition of ships has changed. Container ships now make up 31 percent of the order backlog, nearly double their share in 2008. Additionally, gas carriers have increased from 5 percent to 15 percent, while the share of bulk carriers has decreased from 31 percent to 17 percent.
China's dominance in the shipbuilding industry represents a major shift in this sector. Chinese yards hold 68 percent of the global order backlog, double their share in 2008, and account for 60 percent of this year's production. South Korea and Japan have decreased to 17 percent and about 8 percent, respectively. Six of the world's ten largest yards by order backlog are now Chinese.
Hengli, which resumed shipbuilding only in 2022, has achieved the highest rank among individual yards with 485 ships on order.
Despite the current number of active builders being around 500, compared to nearly 1,000 in 2008, the industry still faces challenges. Warnings from BIMCO about China's capacity building exist, which may lead to reduced yard utilization in the future.
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