The container ship market was turbulent in 2018
2018-01-08 09:00
New ship orders continue to increase, and a large number of new ships are constantly being delivered. After the supply and demand rebalancing in 2017, the container ship market in 2018 will be a turbulent year under double pressure.
Alphaliner points out that container ship orders in 2017 increased by 140% year-on-year, reaching 671,641 TEU. However, due to the increase in deliveries and the decrease in demolition, the proportion of backlog orders to the existing fleet has dropped from 15.7% at the end of 2016 to the current 12.6%.
Alphaliner expects container ship orders to continue to increase in 2018. Many shipowners, including Hyundai Merchant Marine and Yang Ming Marine Transport, will sign construction contracts with Asian shipyards, while some non-operating shipowners are still keen to build new ships because of the currently attractive prices of new ships.
In fact, Hyundai Merchant Marine, Yang Ming Marine Transport, and some other small container shipping companies have clearly stated that they plan to order new ships given the improved trading conditions in 2017. CK Yoo, President and CEO of Hyundai Merchant Marine, reiterated his growth aspirations in his New Year's message, including ordering ultra-large container ships. The company will continue to consider how to double its fleet size from the current 347,000 TEU by 2022, a plan that also includes promoting the operation of an ultra-large container ship fleet. CK Yoo said that the company achieved its annual growth plan in 2017, with its container volume capacity increasing from 3 million TEU in 2016 to 4 million TEU in 2017, and regaining customer support.
As of December 31, 2017, global container ship orders totaled 345 ships with a capacity of 2.67 million TEU, with most orders being for large container ships. This includes 9 22,000 TEU container ships from CMA CGM and 11 22,000 TEU container ships from Mediterranean Shipping Company. In addition, COSCO Shipping Group ordered 28 container ships totaling 496,000 TEU, with an average capacity of 17,700 TEU per ship. The capacity of these new ships is equivalent to 27.6% of the company's fleet capacity.
Alphaliner predicts that container ship deliveries will increase to 1.49 million TEU in 2018, while the demolition of older container ships is expected to decrease to 350,000 TEU, with an expected fleet capacity increase of 5.6% for the year. Alphaliner data shows that as of the end of 2017, the global container ship fleet grew to 5,177 ships with a capacity of 21.1 million TEU, an increase of 3.7% year-on-year.
Meanwhile, Braemar ACM data shows that a total of 153 container ships were demolished in 2017, totaling 437,000 TEU, a decrease from 182 ships and 658,000 TEU in 2016. Benefiting from the growth in container shipping demand and ship charter rates in the first half of 2017, container ship owners no longer demolished ships.
Alphaliner data shows that a total of 117 container ships were idled in 2017, totaling 416,000 TEU, accounting for 2% of the global fleet, reaching the lowest level since 2015, significantly lower than the peak of 400 ships in 2016.
Analysts say that overall, the container ship market in 2018 still faces a turbulent situation. Although affected by weak demand and seasonal fluctuations, rising oil prices and market protectionism are additional threats to container shipping demand growth in 2018-2019.
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