Tradewinds has already predicted the

Tradewinds has already predicted the supercycle of shipbuilding since March 2022. Even if you read the article again now, it seems that the shipbuilding industry has been continuously increasing in price and increasing orders.

The supercycle has already been in progress for two years.

Attached below is an article from that time.

In addition, strong orders for tankers finally began in December 2023, and even bulkers began in February this year.

The active order of tankers and bulkers signals an unusual change in the Joseon cycle.

Predictions of supercycle predicted by Tradewinds

3/24/2022

[Article title: Broker Barry Rogliano Salles (BRS) talks about the possibility of supercycle]
Positive factors such as decarbonization and fleet replacement are fueling demand.

Shipbroker BRS predicted that shipyards could benefit from a supercycle due to a recent demand recovery. The last time a shipyard saw a supercycle was from 2005 to 2008. A broker in Paris believes that the current conditions are just right for such a supercycle to occur again. The BRS said in its annual report that the last supercycle was led by China, but this time its drive could be de-carbonization regulations and fleet renewals that further fuel demand.
The broker said, "Evidence is beginning to be presented to suggest that the new supercycle is beginning to loom." This will not be driven by a new Chinese economic boom, but rather a copy of the shipping boom, where an astonishing number of ships were ordered from 2003 to 2008, as was the case in the 2000s.

BRS found the first sign of the supercycle in 2021, when 132 million dwt of ships were ordered in 2021 compared to 75 million dwt in 2020, which was affected by Covid, and prices were also up 30%.

In addition, there was a dramatic suppression of shipbuilding capa after 2008. In 2008, there were 682 shipyards, but now only 275 are left. Due to this decrease in capa, shipyards are already filling a lot of slots in 2025. (As of March 2022)

Between 2005 and 2010, 2,000 ships could be built annually, but now only 1,250 can be built. By merger, the nine largest shipyards control 75 percent of the world's construction capacity. If fewer shipyards have more capa, they will be in a more advantageous position in the market.
While the number of new shipbuilding caps is decreasing, the world's fleet is getting larger. This will increase the demand for replacement of the fleet. The number of ships in the fleet was 30,864 in 2008 to 40,588 in 2021.

Decarbonization regulations are also putting pressure on shipowners to replace non-environmentally friendly ships built before 2010. The willingness to order low-carbon emission vessels is shown by shipowners' new shipbuilding orders to meet the EEDI of phase 3 long before the EEXI strengthens and goes into effect in 2025.

The BRS also pointed out that orders for alternative fuels such as LNG, LPG and methanol propulsion ships are increasing even though regulations have not yet begun.
While there are many positive signs for the shipyard, there are several possibilities that the start of the supercycle has not yet been properly implemented, the BRS said.

1. Last year's order might be the result of an unexpected boom in post-Covid economic rebounds and container and drybulk fares rather than supercycle.
2. The average age of decommissioned ships is still over 25 years old, an indication that ship owners are not rushing to replace their old ones with new ones. These signals could suggest that the new supercycle cannot start until mid-2025, when the EEDi takes effect.
3. There are also always black swans, such as the COVID-19 pandemic, sudden changes in raw material prices, natural disasters and sanctions, which can affect the direction of the market.

4/4/2022
[Article title: Clarkson says new shipbuilding prices are the highest since 2009]

The broker predicts that there is little chance that the new stock market will go down and actually go higher.

The outstanding shipbroker said the new market had reached its highest level in a decade, driven by a combination of demand supply and inflationary pressures.

Clarkson's new index is 156 pt, up 25% from its low point in November 2020, and it has risen more than a year to reach its highest price since 2009. The pace of increase has been rapid, and the index's increase in the last 16 months has been faster than the increase in the same period since 2005. The combination of demand-supply and inflationary pressure in Joseon supported the rise in new capital.

The overall order was high in 2021, so the backlog of the shipyard increased from 2.4 years in 2019 to 2.9 years now.
After record orders for containers and gas carriers, the shipyard's slot availability was pushed back to 2025, the broker said.
Meanwhile, cost inflation has been significant as rear plate prices have remained at their peak since a sharp rise in 2021. China's rear plate price is $800/ton, up 250 dollars since April 2020. However, Clarkson said inflation adjustments based on U.S. consumer prices are still below where they were at the beginning of 2016. Container shipping prices rose the most, with the 15500 teu neo-panamax up 47% since the start of 2021. Cape-Size Bulker's Shinjo rose 32%, MR tanker rose 21%, and LNG carriers rose 18%. Clarkson said higher Shinjo will eventually increase shipyard profits, but this is complicated by the time of order, price trends, and the cost structure of individual contracts.

"While the momentum of ordering continues to some extent, we expect fewer orders due to higher prices, longer lead times, and continued uncertainty about alternative fuel options," the broker said. "More volatility will be greater, but the higher prices now amplify the cost of fleet replacement," Clarkson said. The Clarkson index usually does not include the cost of alternative fuels, with 37% of orders since early 2021 containing material energy saving technology. (On a tonnage basis)
Excluding these cost increases, the price increase since 2020 has burdened $17 billion more on the cost of new shipbuilding orders placed after the beginning of the year 21, which is equivalent to the value of 150 new VLCCs.
"The downward pressure on the current price is limited," Clarkson warned, however, that while ship owners may think the current price is too high, this price could rise further with inflation.