Newbuilding Prices Reach 16-Year High

Industry trade group BIMCO has reported that newbuilding prices have reached a 16-year-high following a surge in orders in 2023.

According to BIMCO analyst Niels Rasmussen, newbuilding prices have risen an enormous 53% since a low point in late 2020. During this same period, the newbuild order book has grown by 72%, reaching its highest level since 2012. Further, newbuild orders are up 2% year-to-date.

At present, shipyards’ global order book stands at 133m Compensated Gross Tonnage (CGT) - an increase of 56m CGT compared to the order book’s most recent low in late 2020.

Of the increase in orders, LNG ships account for 35% of the total. Orders for containerships, however, have fallen. Year-to-date, containership orders have fallen 16%.

Rasmussen’s analysis of the newbuild market found that so far in 2024, the tanker and LNG segments combined have been the main drivers of growth of the global order book. The LPG tanker, cruise ship, chemical tanker and ro-ro order books have seen double-digit growth. 

Is such a rosy picture for the newbuild sector set to continue? According to BIMCO, yes. 

With ambitious emission reduction targets being placed on the shipping industry, the large generation of ships built during the 2000s will soon need to be replaced, presenting further potential orders for the world’s shipyards.

Indeed, as we have written about previously, certain shipping segments such as dry bulk have lagged behind on green investments, suggesting a potential boom in newbuilds for these segments.

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