Shipbuilding boom runs into capacity wall
Chinese yards captured 70% of first-quarter orders as delivery slots tightened.
Global shipbuilding orders have pushed the industry's orderbook to a 17-year high, straining Asia-Pacific (APAC) yard capacity and tightening delivery slots through the end of the decade.
“The order book has been boosted by higher newbuilding contracting throughout the 2020s and most recently by the highest quarterly crude tanker contracting in history,” the Baltic and International Maritime Council (BIMCO) said in a report.
Chinese and South Korean yards captured about 90% of global newbuilding orders in the first quarter, tightening Northeast Asia's grip on ship deliveries and pricing.
BIMCO estimates the global orderbook at 191 million compensated gross tonnes at the end of the first quarter, the highest since 2009. This is equivalent to 17% of the world fleet, the highest orderbook-to-fleet ratio since 2011.
Chinese shipyards captured 70% of orders during the quarter, whilst South Korean yards accounted for 20%. Together, Northeast Asian builders secured about 90% of global contracting.
“The APAC region is not merely participating in the cycle; it is increasingly defining it,” Sanjay C. Kuttan, principal professional officer at the Singapore Institute of Technology, told Marine & Industrial Report.
He said the concentration gives the region growing influence over delivery schedules, yard pricing, and technology choices across the global fleet.
The surge in orders is being driven by both fleet replacement and shipping demand.
Filipe Gouveia, shipping analysis manager at BIMCO, said the average container ship is now 14.4 years old, whilst the average tanker is 14.2 years old, approaching the typical 20-year operating life of commercial vessels.
“The current orderbook should not be interpreted purely as fleet growth,” Kuttan said. “A substantial portion is replacement demand.”
Gouveia said demand remains a major factor.
“From the shipping sector side, demand is the main driver,” he said. “As long as shipowners believe they can make a profit, they will keep ordering ships.”
Container vessels account for 30% of the global orderbook, supported by years of cargo growth and fleet renewal. Liquefied natural gas carriers have benefited from rising gas demand, whilst tanker orders have accelerated following sanctions on Russian energy exports.
BIMCO said tankers accounted for 32% of first-quarter contracting, the highest share since 2017. It also noted that 21% of crude tanker capacity and 17% of product tanker capacity are already more than 20 years old.
The growing backlog is exposing capacity constraints across Northeast Asia.
“Because shipyards do not have the capacity to deliver as many ships as wanted, this leads to a gradual increase in the order book over time,” Gouveia said.
Kuttan said many yards are effectively full through 2028 and 2029, forcing owners to compete for increasingly scarce delivery slots. Longer waiting times may also discourage some buyers.
“Shipowners, especially in more volatile markets, may be deterred from ordering new ships if they do not know what the market conditions will be by the time they receive them,” Gouveia said.
The capacity squeeze is also creating an opening for emerging shipbuilding nations.
Vietnam, the Philippines, and India are expanding shipbuilding capabilities, though Gouveia said they remain at an early stage and are focused on less complex vessels.
For now, however, the bottleneck remains concentrated in Northeast Asia, where full orderbooks are making shipyard capacity one of the industry's most valuable assets.
