Newbuilding Price Falling

Newbuilding Price Falling

The Clarkson Newbuilding Price Index as of February 20th recorded the lowest level of 160 points since March 2005, down 17 points (9.6%) from 177 points at the end of last year. The latest figure is down as much as 30 points (15.8%) from the peak of 190 points in August last year.Rally in newbuilding price is hardly expectable for now as shipbuilding ordering activity has almost stopped amid credit crunch, economic downturn and worries about over-supply of vessels. Furthermore, the fall in prices of raw materials such as steel plate puts pressure on the newbuilding prices as well. Fortunately, however, the prices of VLCCs and ultra-large containerships took a smaller hit and, for South Korean shipbuilders, newbuilding prices are being kept bullish in Won terms thanks to the rise in exchange rates. Nevertheless, these relatively encouraging factors are meaningless without newbuilding orders being placed. Reported newbuilding orders to date in 2009 amount to just 18 ships and the accumulative orders since October total just 135 vessels. In CGT terms, newbuilding orders placed in the four months to January came to only 1.95m CGT, down 92.7% on the same period of a year earlier. It can be said that ordering activity in effect ceased considering the fact the average monthly shipbuilding orders since 2003 amounted to around 265 ships.

Published : February 25, 2009