Box ship orders predicted to pick up between Q1-Q3 2011

A RAPIDLY depleting order book and an improved trade outlook could trigger a wave of new orders for containerships by the first quarter of 2011, predicts Alphaliner, ending an unprecedented 22-month slump.

This view was cautiously supported by Philippe Hoelinger, vice president of SeaAxis, when he told Containerisation International's recent Global Liner Shipping conference in London that ordering would begin again as soon as the third quarter of 2011.

"If nothing dramatic happens, the order book by the end of 2010 will go from 4.2 million TEU to 3.5 million TEU, and drop to 2.5 million TEU by the end of 2011. Lines will definitely start ordering in 2011," Mr Hoelinger said.

According to Paris-based Alphaliner, the global order book stands at 655 ships for 4.16 million TEU as of May 1, representing 31 per cent of the existing cellular fleet. It has shrunk from a peak of 7.02 million TEU in July 2008, or 60 per cent of the fleet at that time. As a percentage of the fleet, the order book peaked at 64 per cent in November 2007.

"Based on current delivery projections and assuming no fresh orders are placed between now until the end of the year, the order book will fall to 3.14 million TEU or 22 per cent of the fleet by December 2010," Alphaliner reported.

"If the present drought of orders continued for another 12 months, the order book could fall to a record low of 9.8 per cent by December 2011."

It noted that in the last industry slump in 2002 the order book declined to 17.6 per cent before a recovery that saw sustained ordering activity which lasted six years.

"Alphaliner expects owners and operators to begin to seriously consider placing fresh orders for containerships once the order book ratio goes below 20 per cent, which is expected to be reached by the first quarter of 2011," the report said.

"There are already signs that some owners are considering the placement of new orders during this year, while prices are still competitive and while yards are more receptive towards new designs," its report said.

"Apart from Evergreen, it is still unclear which of the major carriers have the appetite and capacity to take on new orders following last year's industry slump which has wiped out about US$15 billion collectively from the carriers' balance sheets."

The top 20 carriers all have vessels on order "ranging from 12 per cent of the current operated fleet for Hapag-Lloyd to 78 per cent for Cosco. Owners planning to place orders for new ships will still find it hard to secure funding."

(Source: www.schednet.com)