Page 58: of Maritime Reporter Magazine (June 1988)

World Shipbuilding

World shipbuilding orders in 1987 rose to an estimated 13.5-million gross metric tons from 12.7-million tons in 1986, according to Lloyd's

Register of Shipping Annual Re- port. This was an optimistic sign, reversing a three-year decline in the shipbuilding industry.

However, figures published by

Lloyd's Register showed a drop in merchant ship completions during 1987 to 12.3-million gross tons, a decline of 4.6-million gross tons from 1986's total of 16.8-million gross tons.

According to the Annual Summa- ry of Merchant Ships Completed,

Japan and South Korea accounted for just over 4 million gt of the over- all decrease. Despite the reduction,

Japan's output of 5.7-million gross tons represents 46.6 percent of the world's total output. South Korea boasted a 17 percent market share, amounting to just over 2-million gross tons.

Orders for tankers rose substan- tially during 1987 to an estimated 6.1-million metric tons, an increase of about 33 percent over 1986 fig- ures. Newbuilding contracts for

Suezmax and Very Large Crude

Carriers (VLCCs) predominated, with both these vessel types realiz- ing the largest operating profits in recent months.

Once again, for the third consecu- tive year, general cargo and contain- ership building contracts increased to an estimated 3.4-million gross tons, up about 13 percent over 1986 figures.

Orders for bulk carriers were down slightly in 1987 to an esti- mated 2.3-million metric tons.

New Developments

However, in terms of shipbuilding output, the relative positions of Ja- pan and South Korea are likely to be reversed in 1988. According to the delivery schedule of the world orderbook at the end of 1987, South

Korea is due to complete 4-million gt of its total 6-million gt, while Jap- anese yards are due to complete 3.2- million gt of their 5-million gt total orderbook. Of the total world order- book of 22.5-million gt, 13.6-million gt is due for delivery in 1988.

Although a number of countries recorded decreases in their ship- building tonnage output in 1987, others showed significant increases.

Yugoslavia's output of 350,406 gt, an increase of 117,410 gt over 1986, was the third largest in the world, according to all available informa- tion. Spain, with an output of 324,541 gt; Italy, 312,989 gt; the

People's Republic of China, 285721 gt; Romania, 198,443 gt; the United

Kingdom, 194,231 gt; and France, 167,027 gt, showed the largest gains during 1987 among the world ship- building leaders.

Demolitions/Removals

Based on data compiled thus far, high charter rates for VLCC loading in the Persian Gulf provided some shipowners with lucrative returns and, thus, discouraged sales to breakers.

In the dry bulk sector, a second- quarter revival in demand for han- dy-size and Panamax type vessels similiarly created better trading op- portunities and diminished the flow of ships to the breakers' yards. By late 1987, signs of upturn were emerging, too, in the steel-making raw materials trades. This meant that a higher demand emerged for larger ships as well. Accordingly, it is not surprising that across all ves- sel sizes, much lower scrappage duly emerged.

MERCHANT SHIP COMPLETIONS 1963-1987

Number Gross

Year of Ships Tonnage 1963 2,038 9,028,210 1964 2,032 9,723,825 1965 2,202 11,763,251 1966 2,484 14,105,450 1967 2,766 15,156,857 1968 2,740 16,844,962 1969 2,912 18,738,741 1970 2,814 20,979,977 1971 2,917 24,387,691 1972 2,776 26,748,822 1973 2,999 30,408,930 1974 2,949 33,541,289 1975 2,730 34,202,514 1976 2,723 33,922,193 1977 2,796 27,531,824 1978 2,618 18,194,120 1979 2,466 14,289,369 1980 2,412 13,101,104 1981 2,269 16,931,719 1982 2,312 16,820,101 1983 2,276 15,911,143 1984 2,210 18,334,061 1985 1,964 18,156,526 1986 1,634 16,844,909 1987 1,528 12,259,419

Source: Lloyd's Register of Shipping

The fall in total demolition sales was very pronounced in 1987. Based on figures from a leading London ship broker, last year's sales to breakers were about half their 1986 levels in both the tanker and dry cargo sectors.

Laid-Up Tonnage

If 1987 was notable for much- reduced scrapping and a recovery of newbuilding ordering, it was identi- fied too with further reductions in laid-up tonnage. The inactivity total fell for the fifth year in succession.

Interestingly, there was more evi- dence of reductions taking place due to recommissioning of ships for ac- tive service, rather than for delivery to breakers' yards. By year end- 1987, the lay-up total was estimated to be around 10.2-million gt, a fall of over 25 percent from 1986 levels of 14-million gt.

World Orderbook

Far East

Once again as in 1986, Japan and

South Korea dominated the mer- chant shipbuilding market, receiv- ing an estimated 35.6 percent and 31.2 percent, respectively, of the new orders placed during 1987.

However, by year's end, Japan

Source: Lloyd's Register of Shipping and

Maritime Reporter/Engineering News million gross tonnage 64 Maritime Reporter/Engineering News