Less than US$4 billion was spent on newbuild orders across most shipping markets in the second quarter of 2018, a significant decrease from the US$10 billion committed in the first quarter of 2018 and US$13 billion in the last quarter of 2017, according to Vessels Value.
Over US$8 billion was committed in the second quarter last year. The total committed to new deliveries is now the lowest since the start of 2016.
Ordering trends in the start of the year were highest in the markets that were seeing the highest returns, including the dry bulk and LNG carrier markets, while interest in the low earnings environment, i.e. tanker markets, was softer.
The decrease in orders has been partially attributed to rising asking prices from shipyards. Higher steel prices, smaller workforces, and less willingness by the yards creditors to accept low margins are contributing to lower buyer interest.
Some of the market segments have a large outstanding orderbook, but most of these are offset by an equal number of ships on the water which are equal to their recycling value.
If orders remain between the US$4-$8 billion dollar level through rest of the year it should support the asset values of younger ships as well.