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The global shipbuilding industry is currently experiencing a significant downturn in newbuilding orders, primarily due to regulatory uncertainties and geopolitical tensions. This decline is particularly evident in the dry bulk sector, where new orders have plummeted to what UK consultants Drewry has described as historic lows.
In a new report, Drewry cited weak freight rates, high newbuilding prices, extended lead times, and overall market uncertainty for the slump in orders, with owners keen to see how Donald Trump’s tariff war plays out before committing to newbuilds as well as the plans by the US Trade Representative surrounding China-linked tonnage and higher American port fees.
2024 ordering levels represented the strongest year since 2008
Ambiguity surrounding future environmental regulations and the adoption of alternative fuels is also causing shipowners to hesitate in placing new orders.
Newbuild ordering as a whole in the first five months of 2025 is down by around 50% year-on-year, according to data from Clarksons Research, albeit from 2024 levels that represented the strongest ordering year since 2008, and with shipyards generally retaining very strong forward orderbook coverage.
Clarksons data (see below) show that with the exception of car carriers, dry bulk, shipping’s largest segment, has seen the biggest retreat in new orders this year.
Overall newbuild prices have eased recently, with Clarksons tracking prices down 1% since the start of the year.
Danish Ship Finance has also forecast that newbuilding prices will decline in the near term, with the number of shipyards securing new orders likely to fall as the appetite for new vessels wanes along with what it sees as softening freight rates.
“We expect that current worldwide uncertainties will prevail, with a renewed pressure on freight markets delaying investment decisions. The new wave of shipbuilding expansion will have a downward impact on newbuilding prices, which should weaken during 2025 by more than 10% depending on type and size of ships, despite the resistance that will remain given the considerable orderbooks,” broker BRS predicted in its annual review published towards the end of March.
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