WORLD SHIPBUILDING

The events of 1982 clearly indicated that the improvement in the world order book, which began in 1979, was only a shortlived respite from the problems which have beset the shipbuilding industry since the mid '70s.

The total volume of new orders placed fell sharply by over 30 percent from 17.2 million gt in 1981 to 11.9 million gt in 1982, the lowest figure since 1978, Tables 1 and 2 and Chart 1. An important factor contributing to this decrease was the slowing up in new ordering for bulk carriers, coupled with continuing lack of demand for new tankers.

The economic outlook continues to be poor, with little change in a low industrial growth rate, an oil surplus arising from a fall off in demand, low freight rates and over tonnaging. The extremely competitive second-hand prices for ships are tempting some shipowners to consider very seriously this option, rather than to order new tonnage, when the occasion arises.

The total order book at the end of the year stood at 29.2 million gt and is comparable to the order book at the beginning of 1980; 79 percent of this tonnage is due to be completed during 1983, Table 3 and Chart 2. Japan acquired nearly 50 percent of the 1982 orders, western Europe's percentage decreased, while the rest of the world showed an increase of five percent on the previous year. This has largely been due to South Korea's increased order book, the continuing growth in export orders from the People's Republic of China, and a substantial order book for Brazil, Poland and the Democratic Republic of Germany.

With the decline in bulk carrier and tanker ordering, there is now a greater emphasis towards more specialized ships; it is noticeable that the containership order book has risen 1.6 million gt at the end of 1981 to 2.9 million gt at the end of 1982.

However, a large percentage of these orders is accounted for by four major owners. Further, there have been moves by some owners to increase capacity by lengthening existing containerships and to achieve operational economies by converting to diesel propulsion or by adopting slow steaming. A steady demand for ro-ro types is illustrated by comparing the 1982 order book figure of 1.05 million gt with that of 1981 (0.82 million gt).

General cargo ships account for 20 percent of the order book, with a switch to building multipurpose ships incorporating limited ro-ro and container facilities.

Fully refrigerated ships show a strong order book, but over-tonnaging could be develop- ing. The optimum capacities appear to be around 4,250, 7,080 and 11,300 cubic meters, although 15,600 cubic meters is in evidence in a few cases.

At the end of 1982 10 cruise ships were on order. A continuing requirement for ferries is evident, with the order book having 115 ships of 403,000 gt as against 95 ferries of 344,000 gt at the end of 1981. Again, the smaller offshore supply ships provide much needed work, there currently being 350 on order. Of this total, 135 units are to be constructed in the U.S.A. South Korea and the People's Republic of China have entered this market, which will bring increased competition for new orders. The overall trend is for bigger and more versatile vessels.

Fifty percent of the order book comprises bulk carriers, including bulk oil carriers, with over 500 ships of 15 million gt currently on order or under construction.

Since last year's report it has been evident that while there have been few cancellations, there has been a move to extend delivery dates, and the rate of ordering is slowing down.

The number of new orders placed in 1982 was 176 bulk carriers of 4.6 million gt. The 18-40,000-dwt bulk carrier has been most favored in 1982. Total completions were 287 ships of 8.4 million gt.

The in-service bulk carrier fleet stands at 119.2 million gt, or 28 percent of the world fleet.

Nearly 54 percent of bulk carriers are under 10 years in age.

Mainly depending on the rate of scrappings and casualties, this percentage will be considerably increased by the addition of 10 million gt, as the estimated 1983 completions come into service.

A five-year analysis, commencing in 1977, on bulk-carrier scrappings shows that the gross tonnaee disposed of in 1978 was 1.5 million but by 1981 this had fallen to just over a quarter of a million.

Although o v e r - t o n n a g i n g is strongly evident for bulk carriers, there is a degree of optimism that there will be enough trade to employ the majority of the fleet over the coming years, particularly in the coal and grain trades.

The work provided to shipyards by tanker new construction continues to decline and tanker orders now only represent 16.5 percent of the order book compared with 30 percent in 1979, Chart 3. In December 1982, there were only four tankers of 100,000 gt or above in the order book. The in-service tanker fleet at the end of June 1982 stood at 166.8 million gt. There are 450 tankers of 34 million gt laid up.

A considerable number of the ships laid up require retrofitting to bring them up to MARPOL 73 requirements. In view of discouraging forecasts for this mar- ket it is questionable whether such ships will re-enter commercial service. Scrap prices for tankers are low, due largely to considerable overcapacity in world steel production. The tanker section is also affected by changing patterns of oil transportation as more supplies come from the North Sea, Alaska, etc., with a corresponding decrease in VLCC sailings from the Gulf. As a result, a number of VLCCs and ULCCs are no longer economically viable but, unfortunately, there continues to be limited shipbreaking capacty to deal with them.

New orders for liquefied gas carriers in 1982 amounted to 17 ships of 0.3 million gt. Of these, two of 200,000 gt were for the carriage of LNG, and the order book now stands at 43 ships of 1.4 million gt (1.9 million cubic meters).

Of this figure 10 ships totaling 900,000 gt are for the car- riage of LNG. Japan has 0.8 million gt of this order book and France 0.2 million gt. Delays in the development of shore facilities to handle this commodity are aggravating the situation, and some of the completions have gone into short-term lay-up.

In 1982 there were no orders for coal-fired ships. Only two are building in Italy and one each in Japan and the U.S.A. In addition there are two tankers being converted to bulk carriers in Spain, and two uncompleted liquefied gas carriers being converted to ore/ bulk/oil carriers in South Korea.

Table 4 compares the performance of the main areas of shipbuilding around the world, Table 5 and Chart 4 present the historical record.

JAPAN Japan clearly dominates the shipbuilding scene as she has done for the last 20 years. Her order book stands at 10 million gt—a third of the world tonnage on order. Seventy percent, or 7 million gt, of this country's order book is due for completion in 1983. Bulk carriers comprise 62 percent (6.2 million gt) of the work in hand. Tankers have declined to 11 percent compared with 32 percent in 1978. The order book is diverse, with a variety of ship types for 38 countries.

The tonnage being constructed for the domestic market has remained nearly constant, while export tonnage has decreased from just over 10 million to less than eight million gt. Flexibility is still the major attribute of the Japanese shipbuilding industry and this is made easier by the fact that the large shipyards tend to be extensions of conglomerates, with other major business outlets.

The yards in western Japan accounted for 1.2 million gt of the completions, comprising bulk carriers, oil tankers, chemical tankers, cargo ships and tugs.

Especially noteworthy among the 1982 completions was the bauxite carrier River Boyne, 80,469 dwt, the first of the new generation of coal-burning ships.

SOUTH KOREA South Korea has, in a difficult year, increased its share of the total order book for the fifth consecutive year. New orders in 1982 amounted to 73 ships of 1.1 million gt. Bulk carriers dominated the total order book with 44 percent (1.1 million gt). General cargo ships, at 1.2 million gt, represent 45 percent of the South Korea order book as against the Japanese 13 percent.

It could become increasingly difficult to fully utilize South Korea's developing shipbuilding facilities if the world order book continues to decline. Incentives in the form of government grants and cheap and abundant labor could be dominant features, but the wide variety of ship types available to clients will also be important.

The principal area for marine activity continued to be Ulsam at the Hyundai and Donghae shipyards where there were 39 ships on order or building.

UNITED KINGDOM The United Kingdom's order book remains virtually unchanged at one million gt, with the major proportion being scheduled for completion within the next 12 months. New orders obtained were 52 ships of 286,000 gt, with completions of 0.4 million gt. Bulk carriers have slightly increased their share of the order book and stand at 57 percent. Work for the offshore industry showed an increase in all parts of the U.K.

FRANCE Over 40 percent of the French order book (717,896 gt) is accounted for by LNG, LPG and.

containerships. Most of the remainder is made up of passenger and general cargo ships.

Great efforts are being made by the French shipbuilding industry to improve its competitiveness in export markets, and mergers are planned which will leave only two major shipbuilding groups in France.

The Finnish shipbuilding industry is of interest as it managed to avoid the worst of the recession in shipbuilding. From an order book of 75 ships (600,000 gt), 58 are for registration in the USSR. It is of interest too that no bulk carriers are on order or building in Finland; the predominant ship types are ro-ro, passenger, tugs and supply ships.

Brazil continues to be among the world leaders in shipbuilding.

The outlook for shipbuilding orders looks more hopeful with several important orders being received by various yards. During 1982 the largest offshore structure ever built in South America, the steel jacket for the Namorado II platform, was towed from