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Contracting for new-build ships collapses

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World Coal,

The shipping industry is experiencing the lowest levels of new-build contracts in 20 years, according to international shipping association, BIMCO.

“Since the high contracting in 2013, BIMCO expected the shipyards could come under pressure,” said Peter Sand, Chief Shipping Analyst at BIMCO. “This expectation became a reality at the start of 2016 with 1Q16 contracting the second lowest compensated gross tonnage (CGT) in 20 years.”

CGT is an indicator of the amount of work that is necessary to build a ship.

Sand added: “A low level of contracting is exactly what the shipping industry needs in order to eventually restore the fundamental balance between supply and demand.”

Shipyards in Europe were the only ones to see an increase in contracting in the first eight months of the year – up 45.3% on 2015. Japan and South Korea have suffered the worst decline – down by 86.7% and 86.5%, respectively. China contracted 49% less CGT.

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