Lloyd's List is part of Maritime Intelligence

This site is operated by a business or businesses owned by Maritime Insights & Intelligence Limited, registered in England and Wales with company number 13831625 and address c/o Hackwood Secretaries Limited, One Silk Street, London EC2Y 8HQ, United Kingdom. Lloyd’s List Intelligence is a trading name of Maritime Insights & Intelligence Limited. Lloyd’s is the registered trademark of the Society Incorporated by the Lloyd’s Act 1871 by the name of Lloyd’s.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call UK support at +44 (0)20 3377 3996 / APAC support at +65 6508 2430

Printed By


Shipping’s short-term outlook looks golden, but uncertainties loom large

The shipping market is being driven by a fear of missing out, but will the orders being placed today be profitable in the long term — and are they the right orders for tomorrow’s markets?

The growing orderbook and rising prices are not deterring cash-rich owners or hungry yards, as all core markets continue to perform strongly at the same time, while the global disruption fuelling record tonne-miles shows no sign of abating. But is it really different this time round?

GLOBAL disruption is good for business.

The maritime sector is booming.

Unusually for shipping, nearly every single market is positive right now, with very few signs of an immediate end to the party in sight.

In the box sector, successive disruptions are driving rates towards levels not seen since the Covid pandemic.

Lines are projecting triple-digit income increases, reflecting the time charter equivalent earnings that are now in the triple-digit thousands of dollars range.

A bifurcated market and record tonne-miles has seen tanker earnings exceed already high expectations, with analysts openly announcing a “golden era” for tanker takings.

Asset values for chemical tankers are approaching all-time highs, thanks to the same story playing out across most asset classes right now: years of underinvestment, held back by uncertainty.

The numbers are massive. The sentiment is reaching fever pitch. The market is — to quote one shell-shocked shipowner still recovering from the industry’s recent Posidonia gathering — “absolutely bloody nuts”.

In this febrile atmosphere, cash-rich owners preaching optimistic forecasts of sustained market fortunes have been beating a path to the shipyards’ doors amid record high newbuilding prices.

The big names are all back in: Marinakis, Idan Ofer, Procopiou, Döhle, MSC, CMA CGM, Maersk... the list goes on.

The yards, meanwhile, desperate to cash in, are seeking to expand capacity.

Yangzijiang Shipbuilding is rumoured to be planning a new dock. New Times Shipbuilding, one of China’s largest privately owned yards, is awaiting government approval for similar plans.

Even South Korea’s Hanwha is said to be considering a new floating dock order, while yards previously consigned to repairs are being looked at as possible expansion opportunities.

How much of this will materialise is not yet clear, but the market been struck by an acute case of FOMO (fear of missing out).

In the short term, all this makes sense.

Even an easing of tensions in the Middle East is not likely to bring about a quick cessation of the assaults that have, for some lines, absorbed 20% of capacity in the resulting disruption and rerouting.

Tanker analysts have been rapidly re-readjusting their market forecasts this week, based on modelling that assumes Red Sea disruption will continue into 2025 in the wake of the latest deadly attacks.

But the rush to order now amid constrained yard capacity comes at a cost, with more than just financial implications to worry about.

The current sky-high newbuilding prices beg the obvious question of whether owners can win in the long term.

Buying an 8,000 teu dual-fuelled boxship at $140m assumes earnings of more than $50,000 a day for 15 years. If you are buying very large crude carriers at $140m, you are making bets in excess of $60,000 a day.

Amid the excitement, there are those questioning how many people ever make money at these rates in the long term.

Newbuild prices are up 40% compared to pre-pandemic levels. This is not yet anywhere near the shirt-losing heights of the 2006-2008 ordering supercycle that preceded the financial crash, but high enough to make more conservative owners with a long enough memory, nervous.

There are enough people around this market who remember capesize bulkers being bought for $120m that even amid today’s elevated prices can be bought for $70m. 

The ill-fated phrase “this time it’s different” has already been deployed and the numbers back that up.

The orderbook today is less than 50% of what it was in 2008: 290m dwt versus 660m dwt.

At least one-quarter of that orderbook was never completed, as shipowners cancelled orders following a consequent slump in shipping markets. The other factor the last time was that shipyards were being driven to bankruptcy.

FOMO is fleeting, but the ships being ordered at pace today are going to be with the market for the next 20 years, which raises the other consequence of this race to order.

The current ordering boom has hit before there is any certainty over green fuel supply or regulation.

Despite an initial appetite from owners to ready themselves for the incoming supply of green methanol and ultimately ammonia choices, the current safer bet for many has been liquefied natural gas.

Even Maersk, the vanguard pioneer of green methanol, is now rumoured to be looking at LNG dual-fuelled newbuilds, having failed to secure the support it was anticipating from some stakeholders.

While there are perfectly good reasons behind a swing back towards the proven efficiency of LNG — not least the options for fuel blending and biofuel pathways — even the most eco-friendly owners concede such decisions are driven more by cost and pragmatism than any ideological environmental factors.

“It has nothing to do with the environment,” commented one owner with several dual-fuelled orders in train.

“It’s purely cost. It’s going to be cheaper. And, as long as the EU continues to pump carbon costs up on conventional fuel while ignoring the methane slip from LNG, you’re going to make things worse for the environment again, and put more money into the shipowners’ pockets.”

This article is part of Lloyd’s List’s Half-year Outlook 

Related Content


  • Related Companies
  • UsernamePublicRestriction



    Ask The Analyst

    Please Note: You can also Click below Link for Ask the Analyst
    Ask The Analyst

    Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

    All fields are required.

    Please make sure all fields are completed.

    Please make sure you have filled out all fields

    Please make sure you have filled out all fields

    Please enter a valid e-mail address

    Please enter a valid Phone Number

    Ask your question to our analysts