Newbuild prices see sharpest increase for almost two decades

According to Clarksons newbuild prices are experiencing the sharpest increase for almost two decades thanks largely to the extremely high number of containerships and LNG carriers ordered over the past 15 months.

Vessel newbuilding prices have been rising for over a year, and the overall Clarkson Newbuilding Price Index now stands at 156 points, up 25% since the November 2020 low, indicating the highest prices – in nominal terms – since 2009.

“The pace of increase has been rapid and the gain in our index over the last 16 months is the sharpest percentage rise over any equivalent period since 2005,” the latest weekly report from Clarkson Research Services stated.

Moreover, any owner wanting to order a ship today faces a considerable wait. Shipyard forward cover has increased to 2.9 years from 2.4 in November 2019.

Despite the 25% increase in overall newbuild prices, shipbuilders are not making massive profits. This is thanks to soaring costs. Steel prices, for instance, remain elevated after big increases in 2021 Chinese steel plate today costs around $800 per tonne, up by around $250 per tonne since April 2020.

“A basic inflation adjustment suggests that in ‘real’ terms newbuild prices are actually still below start 2016,” Clarksons suggested.