It is estimated that the seemingly stable newbuilding price is estimated to declined by over 10% by the end of 2013.
According to DSF newbuilding price will drop a new low at about $1,456/CGT by then, almost the same level in 2002. DFS points out that newbuilding cost declined by only 3% in the third quarter of last year. However, the restructuring of small and medium shipyards due to order drought made global shipbuilding capacity shrink by 20%-30%.
DFS estimates that new orders will see no strong recovery in next one or two year, especially boxships. Most boxship owners think asset value will keep declining with the market imbalance getting further intensified.
A ten-year 3,500TEU boxship has depreciated by 44% in last year and by 70% from 2008. The value of a five-year 3,5000TEU unit devalued by 32% since the beginning of this year while by 50% in last year.
Newbuilding price has also dropped by 20%, driving shipyards’ profits down nearly to zero. DSF discloses that newbuilding price has been close to the cost and likely to hit the bottom. No more new order fever is expected, DSF says.
The global order catalog for boxships stands at about 3.0m TEU currently, which has greatly surpass the market demand. About 50% of the orders are scheduled for delivery in this year.  According to DSF, the investment in mega boxship on Asia-Europe lines has been on the cliff edge.