In recent years there has been a growing need to better understand activity in the ship repair and refurbishment sector. A recent analysis published in Shipping Intelligence Network, discuss the reasons behind this interest and present some highlights from a new intelligence flow of ship repair activity.
The busiest shipyard
The Graph of the Week CIC Changxing is highlighted as the busiest repair yard in the world (by number of special surveys in 2018) and detail trends towards upgrading and retrofitting of ships.
Larger Fleet, Fewer Newbuilds?
Some of the interest in repair and refurbishments stems from the much larger fleet today (65% more tonnage on the water compared to ten years ago, 25% more by number).
Not only is this a bigger potential market for repair yards, but also for suppliers looking to balance the lower newbuilding volumes with an expansion of service and after sales business lines.
Going for “Retro”?
Some shipping segments have a history of significant CAPEX spend at points in a vessel life cycle. For many segments passing special survey and related steel renewal or paint coatings was often the extent of investment.
With environmental regulations driving new “eco” technology solutions, retrofitting of Ballast Water Treatment Systems (BWTS) and now Scrubbers has ramped up.
Alongside the focus on fuel economics, relatively modern vessels are increasingly considered “old” designs impacting asset value and earning potential.
We suspect these investments are the start of a trend (it already seems that LNG as a fuel is gaining further traction).
Counting Scrubbers
The intelligence flow also helps us track repair yards involved with retro-fitting SOx scrubbers, providing insights into overall yard capacity and the time taken to complete an installation.
- Our overall “Scrubber Count” now stands at over 3,000 vessels.
- We estimate “off hire” time involved in the retrofits will reduce available fleet supply in 2019 by:
- 1.0% (containerships),
- 1.4% (crude tankers) and
- 0.5% (bulk carriers).
The data also details the small number of LNG fuel conversions to date (including the first containership conversion to be carried out at the Huarun Dadong yard).
Refurbishing markets
The repair data also reveals some significant refurbishment markets.
- In the past ten years, we have recorded over 650 cruise refurbishments, with Grand Bahama topping the charts (35 cruise special surveys and refurbishments in 2018).
- Increasingly cruise lines carry out major investment programs, in part to standardize their various brands.
- Conversion activity is also detailed in the data, with increased FPSO activity now expected.
So perhaps in a maritime world faced with environmental regulation and a relatively modern fleet, it’s worth keeping a closer eye on ship repair.
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Source: Shipping Intelligence Network
