'Not a Peak After All'... Massive Capital Flow Driven by Ships, Orders Nearly 'Sold Out' [Click eStock]

Record-Breaking Orders from January to April, Up 62% Year-on-Year
Solid Growth Across Vessel Types; Ship Price Trends Remain Favorable

Hanwha Ocean Geoje Plant on March 12 Photo by Yonhap News

The shipbuilding industry continues to experience an unexpectedly strong boom. Newbuilding prices remain robust, and secondhand vessel prices are on the rise. Except for gas carriers, freight rates are rebounding across most vessel types.

On May 12, Samsung Securities analyzed that global shipbuilding data for January to April of this year showed an ideal trend. According to Clarkson, a UK-based shipbuilding and shipping market analysis firm, global cumulative orders in the shipbuilding industry for January to April 2026 reached 54 million gross tons (GT), an increase of approximately 62% compared to the same period last year. Although there is a base effect as the majority of orders last year were concentrated in the second half, the industry has already achieved 44% of last year’s total annual orders. This also corresponds to 67% of the average annual order volume over the past decade. This strong order momentum at the start of the year is the reason for the positive outlook.

There is also steady demand across different vessel types. Demand for energy carriers, which has drawn market attention due to the Middle East crisis stemming from the war between the United States and Iran, remains strong. Orders for oil tankers have already reached 94% of last year’s total annual order volume. For large liquefied natural gas (LNG) carriers, orders amount to 97% of last year’s total.

Container ships are also showing unexpected strength. The cumulative order volume for January to April reached 14 million TEU (with 1 TEU representing one 20-foot container), which is 61% of the average annual order volume of 23 million TEU over the past decade. For two consecutive years, container ship orders have set new record highs, and the order backlog is now close to 1.9 times the peak level seen during the 2008 boom. Han Youngsoo, a researcher at Samsung Securities, explained, "Container ships are the most sensitive vessel type to environmental regulations and economic variables. Still, despite concerns about future supply-demand imbalances, delays in environmental regulations, and ongoing war, shipowners continue to purchase vessels steadily."

Due to the strong order flow, the global order backlog increased by 19.9% compared to the same period last year and by 7.6% compared to the end of last year. The current order backlog is equivalent to 4.4 times the expected construction volume for this year. This limits shipbuilders’ incentives to accept low-priced orders.

Vessel price trends are also favorable. The surge in freight rates caused by the Middle East crisis is driving up secondhand vessel prices. The rebound in secondhand vessel prices, which represent the residual value of ships, and the strong freight market are raising expectations for improved ordering capacity among shipowners, which in turn is pushing up newbuilding prices. Across vessel types, price indices for bulk carriers, gas carriers, oil tankers, and container ships have all increased. The overall newbuilding price index, which incorporates ship brokers’ investment sentiment, has also begun to rebound after a time lag.

In summary, most shipbuilding indicators are showing strength that makes last year’s concerns about a peak in market conditions seem unfounded. Clarkson has revised its global shipbuilding order estimates for this year and next upward by 28% and 11%, respectively, compared to its estimates from the second half of last year. Researcher Han analyzed, "Shipbuilding valuations are still subject to a significant discount compared to other Korean industrial companies. The current share price does not yet fully reflect the strong market indicators."

This content was produced with the assistance of AI translation services.