by Lloyd's List
27 September 2024 (Lloyd's List) - THE rush to order containership newbuildings — which has seen more than 200 boxships, with a combined capacity of almost 3m teu, ordered since January — has been a boon for China.
Containership newbuilding orders since January are running at their second-highest level historically, below only 2021 when a total of 4m teu of slot capacity was ordered.
Chinese shipbuilders have mopped up some 80% of all containership newbuilding orders in teu capacity terms since the beginning of the year, according to data tracked by Lloyd’s List.
Lower contract pricing, earlier delivery slots and a stable workforce have provided Chinese shipyards with an edge over their competitors when negotiating newbuilding contracts.
“China has managed to maintain a competitive pricing advantage. This price incentive has assisted Chinese yards in dominating containership orders for about five years now,” said Braemar container market analyst Jonathan Roach.
According to Braemar data, China now holds 61% of the total containership orderbook.
Long-term labour challenges in South Korea and Japan have been one of the factors helping China maintain a price gap. Labour shortages, due to a lack of young people entering the shipbuilding sector, have become a big problem for South Korean shipyards in the past three years.
Shortage of labour has been a contributor to labour unrest that has plagued most of the big South Korean shipbuilders this year and is driving up wages.
Other factors providing Chinese shipyards with an advantage include low shipbuilding steel plate prices and competitive China state-backed ship finance.
Data tracked by Lloyd’s List shows that almost 3m teu of containership capacity has been ordered since January, provided by 239 vessels. However, not all of them are believed to be firm contracts, with some awaiting shipbuilding refund guarantees or remaining at letter of intent stage.
Nevertheless, there are several notable orders in the pipeline. The most significant is a much anticipated order from Hapag-Lloyd, the world’s largest fifth-largest operator of containerships.
According to Alphaliner, Hapag-Lloyd is expected to order at least 10 vessels each of 9,000 teu and 16,000 teu, all to liquefied natural gas dual-fuel specification.
It noted that all 20 ships are expected to be built by Chinese shipyards, which still offer a notable price advantage over their South Korean and Japanese competitors.
Privately owned Chinese shipyards Yangzijiang Shipbuilding and New Times Shipbuilding are reported to be the favoured yards to win the newbuilding contracts.
Meanwhile, Greek non-operating owner Euroseas is said to be in the market for up to four 4,300 teu boxships. The company is understood to be close to finalising a deal with Yangzijiang Shipbuilding.
Other potential boxship orders include six 10,000 teu containerships for Hamburg-based tonnage provider Claus Peter Offen. Should an order be signed, they will be the first newbuildings to be ordered by the company in more than a decade.
Another reason why South Korean shipyards have seen fewer containership orders this year is a lack of shipbuilding berth availability.
Most shipbuilders capable of building large containerships have already filled much of their production capability through to 2028 with orders for large gas carriers.
Nevertheless, smaller South Korean yards have had some success in picking up boxship orders.
Belgium’s CLdN recently announced orders for 10 1,100 teu ships at HD Hyundai Mipo Dockyard, while Navios Maritime Partners has confirmed that it has added two more 7,900 teu vessels to an existing order for four such vessels at HJ Shipbuilding & Construction.
