The global shipbuilding industry will have to face very low demand for a considerable while, according to German maritime industry association VSM.
The suspension of orders due to the coronavirus pandemic is aggravating the global under-utilisation of shipyards that has existed for some time. VSM assesses that worldwide new orders in the past four years have been -40% below the volume which has been in production. Dumping prices and state subsidisation are common, it adds.
German shipyards, by comparison, have fared relatively well in recent years, due to specialisation in hi-tech segments, such as luxury yachts and cruise vessels. Before the advent of Covid-19, the order backlog of German yards translated to a capacity utilisation of four years, against only two years at Southeast Asian shipbuilders. But long production periods for such vessels make yards more vulnerable to a suspension of orders, VSM notes.
While overall plate demand in Germany has been low for some years, shipyards’ demand for plate has been healthy, Kallanish hears from a specialised stockholder. The plate typically used for ships is relatively thin, 10-15mm, and up to 40mm for ships travelling in frozen waters in Arctic zones.
With construction now suspended at some particularly big projects (see separate story), production volumes in Europe could drop by as much as -50-75%, VSM fears. The critical mass would not be sufficient to keep shipyards afloat, unless countermeasures are taken.
VSM has liaised with partner organisations in other countries to ask governments to launch programmes in support of public and military vessels. However, with most countries already supporting private enterprises during the crisis, they may, ironically, not have the money for such governmental programmes.