Consulting firm Maritime Strategies International (MSI) forecast in a recent report that there will be a structural change to shipping cycles in the near future as excess shipyard capacity and considerable orderbook bear down on the industry.
MSI consultant Adam Kent stressed there will be “shorter” and “sharper” cycles as shipyards grapple with overcapacity.
He added that demand will come from major shipping sectors such as crude tankers, containers and chemical tankers over the next five years.
“Convert this into growth in shipping requirements by factoring in distances, speed, port times, waiting time and ballast ratios, the picture becomes even more positive for crude tankers and containers, chemical tankers and LNG carriers,”
Still, oversupply remains an issue as the orderbook, or unfulfilled orders outstrips ageing fleets, except for multi-purpose carriers, Ro-Ro and pure car/truck carriers, the consultancy further said.
Shipyards are still operating at overcapacity, MSI added, because based on orderbooks and maximum historical output, the three major shipbuilding markets are only fully booked until the end of this year. In 2017, demand is expected to drop to 70% of capacity in Korea and Japan, and close to 50% in China.