The cost of shipbuilding seen falling

After several years of continuous increase in the cost of building ships, a new analysis shows that the time has come for prices to correct.

“Although the outlook for 2024 is increasingly uncertain, our basic assessment is that the prices of new vessels will drop this year,” estimated Stuart Nicoll, Director of the British shipping analysis company Maritime Strategies International (MSI).

It is noted that high shipbuilding costs have been a key obstacle in recent years for many shipping companies that have had to renew their fleets in the face of strict environmental regulations.

“We forecast overall shipbuilding activity to be lower than new ship deliveries in 2024 and 2025,” Nicoll noted, adding that this “will result in a drop in the global order book of 198 million GT ships at the end of this year to ships with a capacity of 167 million GT at the end of next year.”

“Such a development should bring about a reduction in the future coverage (forward cover) of shipyard operations and, by extension, shipyard costs,” the analyst pointed out.

The range of prices

Current shipbuilding costs in most ship categories are at their highest level in five years.

According to the latest weekly report of the shipping company Intermodal, this is happening in all sizes of tankers, in LNG and LPG carriers, and in large bulk carriers, such as Newcastlemax and capesize.

In the remaining categories, such as kamsarmax, ultramax and handysize, costs are slightly below their five-year high.