More seriously, this is how markets are supposed to work.
A deep dive from Splash 24/7:
Ship orders plummet to lowest level seen this century
New shipbuilding orders in the first half declined 57% to the lowest levels seen this century, according to data from Clarkson Research Services. Just 269 ships – equivalent to 5.75m cgt – were contracted in the first six months around the world, putting many yards in jeopardy of running out of business in the coming year.....MUCH MORE
As of the end of June, global shipbuilders’ order backlog reached 70.77m cgt, down 2% from a month ago. South Korea’s order backlog reached 19.76m cgt, accounting for 28% of the total while China held 26.13m cgt or 37% and Japan had 9.54m cgt on its books, representing a 14% global marketshare.
Commenting on the plight shipyards face today, Dag Kilen, head of research at Fearnleys, said owners were holding back from putting pen to paper for new tonnage over the uncertain green regulatory framework ahead.
“Covid is part of the explanation, but it was a weakening trend there already before Covid which stems from uncertainty on what to do about propulsion and coming stricter emission regulations,” Kilen said.
LNG dual-fuel is an alternative today but Kilen said it remained too expensive for many, while alternatives like ammonia and hydrogen are still under development.
“There is a wait-and-see approach among many owners,” Kilen said.
A report from Danish Ship Finance published in May suggested there will be more than 200 yard closures in the coming months and years.
Half of active yards have not seen any new orders since 2018 and orderbooks are now petering out for many shipbuilders....
