Marine Log - December 2007 - (Page 18)

SHIPBUILDING ICE CLASS TANKERS Historical and Projected New Construction Activity -m GT Orderbook Deliveries New Orders Residual Orderbook 228 220 180 140 100 340 300 260 328 100.2 132.3 82.8 80.4 Source: ABS 245 211 80.1 85.5 87.4 88.1 89.9 94.9 107.2 119 74.5 77.3 66.6 60 20 -20 -60 -100 -140 -36.7 -41.1 -46.3 -52.8 -61.8 -70.3 -91.1 -81.7 -115.6 -124.5 -115.1 -78.3 -83.6 -82.7 2003 2004 2003 2005 2006 2006 2007 2007 298.1 31.0% 2008 2008 328.1 10.1% 2009 2009 319.8 -2.5% 2010 2010 2011 2011 2012 2012 2013 2013 216.3 2.7% 2014 2015 2016 244.6 5.2% 2016 2004 152.4 28.3% 2005 172.9 13.5% 2014 226.1 4.5% 2015 232.4 2.8% YE Ordrbk % Growth 118.8 51.9% 227.6 31.6% 284.6 240.3 210.7 -11.0% -15.6% -12.3% deadweight in 2010—the tanker phase out deadline, the continued growth in seaborne trade, and the availability of shipyard capacity as the new yards come on stream. At that time, the enlarged and very young fleet, coupled with a more traditional pace of new construction replacement ordering, should be more than ade- quate to handle the projected volumes of world trade. The result would be that annual deliveries would decline to a level that would be significantly below the projected capacity of the additional and more productive yards. In 2003, the year end world orderbook stood at 119m gross tons. By end 2006 this had almost doubled to 209m gross Historical and Projected Deliveries - m Dwt 200 New Orders Anticipated 151.8 Historical & Current Orderbook 66.1 0.4 131.3 168.2 150 120.0 122.3 114.1 122.0 100 90.6 70.2 75.5 112.2 99.4 50 Source: ABS 55.6 61.9 35.2 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 tons and is projected to grow through next year, peaking at close to 330m gt before steadily declining to the end-2006 levels by late 2011. If a more pessimistic estimate of world GDP is factored in, orderbook levels could drop to below 150 gt by 2016. If shipowners continue to order based on need, rather than be lured by what can be expected to become aggressively attractive pricing, it is projected that a growing proportion of world shipbuilding capacity will be underutilized, beginning in 2012. If compensated gross tons are considered, the excess capacity shrinks but still persists through 2016. On the pessimistic side of the ledger, future improvements in productivity that can be expected at yards in China, Vietnam and India will further exacerbate the situation. Absent some completely unforeseen market dislocation, this scenario has a high probability of occurring. What then, will be its impact? If history repeats itself, the excess capacity will most probably precipitate a price war that can be expected to benefit shipowners for an extended period of www.marinelog.com 18 MARINE LOG DECEMBER 2007 http://www.marinelog.com

Table of Contents Feed for the Digital Edition of Marine Log - December 2007

Marine Log - December 2007 Contents Editorial Second Thoughts Update Inside Washington Warning: Shipbuilding Over-Supply by 2011 Steely Resolve: Cutting Injuries What’s on Your Mind? Newsmakers Tech News Contracts Events InfoDirect Website Directory ML Marketplace Last Word

Marine Log - December 2007

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