The vessel data was gleamed from Lloyd’s Register – Fairplay.
According to the study’s analyst, Barney Parsons, the reason for the increase has been due to strong upturn in the world shipbuilding and shipping industries fuelled mainly by the rapidly growing Chinese economy and, to some extent, growth in other “developing economies”.
“World seaborne trade has increased due in part to a boom in demand for commodities such as oil & steel. The commercial shipping industry has become more profitable than during the previous decade and confidence has grown. The overall result has been a surge of orders for vessels and yards currently have full order books,” said Parsons.
“We expect record years ahead with shipbuilding output exceeding 40 million gross tonnes in 2005 and 2006 with compensated gross tonnage (cgt) output in 2006 of 26 million. The total value of shipbuilding output is expected to peak at around US$45 billion in each of these two years with 1,864 vessel deliveries and over 2,850 main engine installations,” he added.
Parsons predicts such high output levels will not continue beyond 2007-08 period but he is confident, in the long-term, overall growth can only go in one direction; up.
“Shipbuilding is a highly cyclical industry and this is likely to continue to be the case. Periods of high owner confidence tend to result in an excess of tonnage which takes the heat out of shipping markets until it is absorbed and the next global economic upturn triggers the next up-cycle. Discounting these cycles, the long-term picture is one of growth. This is also the case for marine propulsion,” said Parsons.
“In 1999 Chinese yards accounted for 7% of main engine installations by value. By 2008, we forecast this to grow to 13%. Korea is also expected to deliver substantially more vessels in our forecast period but due to the impact of China, will not grow its share. Japan’s output will be relatively steady. Other Asian countries are expected to improve their performance [and] Europe will continue to have a high share of the propulsion market as a result of supplying a greater proportion of high-powered multi-engined vessels,” he added.
Parsons believes, however, growth in the propulsion and vessel sectors will come from container vessels and LNG tankers respectively.
“The high power requirements for container vessels mean that this vessel sector will continue to require the greatest amount of main engine power. However, the vessel sector with the strongest growth will be specialised LNG vessels. This fleet will grow considerably as the LNG business grows and the values of engines and propulsion systems installed will more than double over the next five years,” said Parsons.
