The bull run on containership newbuildings is set to continue as a hike in vessel prices is attracting an increasing number of shipyards to the booming sector.
According to brokers in the Far East, boxship newbuilding prices have increased by 5% in the past few weeks and by more than 20% in the last year.
Not only are prices rising but yards are now seeing improved terms, with owners committing to higher upfront payments.
The price increases come as yard space is filling up and owners struggle to find delivery dates until 2024.
The first quarter of 2021 saw the highest level of containership contracting since the first quarter of 2007, according to Banchero Costa.
Figures from broker Clarksons suggests that, in US dollar terms, the containership sector accounted for 39% of all investment in newbuildings made so far this year.
The shortage of delivery slots is now attracting China’s state-owned yards that have specialised in bulkers to start to show interest in the boxship sector.
Among those now targeting boxships are Tianjin Xingang Shipbuilding Heavy Industry, Qingdao Beihai Shipbuilding Heavy Industry and Shanhaiguan Shipbuilding.
Although orders for ultra-large containerships above 20,000 teu have run dry, brokers say there is growing interest in the 13,000-teu to 15,000-teu sector, and the 7,000-teu segment.
Seaspan Corp’s project to order up to 20 vessels of 7,000 teu each and Sea Consortium’s order for four 7,000-teu units are indicative of the recent shift to smaller vessel sizes.
Indications of a revival
However, there are also indications that there could be a revival in bulker ordering to match that seen in the containership market.
That is likely to make the fight for available dockyard space even more competitive.
One analyst suggested that recent improved rates in the dry sector, and two years of low dry bulk newbuilding contracting, could soon spark a rush to order.
“Given how the spot market for bulkers is going now, I wouldn’t be too surprised if dry bulk newbuildings followed suit with what has been happening with containerships,” Banchero Costa research head Ralph Leszczynski said.
The newbuilding boom in containerships comes as the trading markets continue to see record demand. Ships operating on the main transatlantic and transpacific trades are rumoured to beearning profits of around $15m per trip.
Port disruption and delays caused by the pandemic are thought to be a major factor in the current favourable market conditions.
One executive at a major liner company contacted by TradeWinds said he is not concerned that the continued high levels of ordering will push the container sector into a boom-and-bust scenario.
He added that the world's containership fleet is in need of renewal because of the low levels of investment that preceded the current boom.
He said he believed the end of the pandemic will prove to be a positive for containership demand.
