Shipbuilding study questions the short-term capacity in light of the proposed EU single-hull phase-out regulation

In light of the proposed EU regulation for the phase-out of single-hulled oil tankers INTERTANKO commissioned a study on the availability of shipbuilding capacity. The report, made by MSR-Consult ApS, evaluates the changes in demand for shipbuilding capacity resulting from the EU proposal and discusses the short and medium term development up to 2008. For the purpose of the exercise the study applies the EU proposal to world-wide tanker shipping.

The global shipbuilding industry not only serves the tanker industry but all types of shipping and is today fairly well covered with newbuilding orders into the beginning of 2005. As a result of this, the shipyards will not be able to deliver replacement tonnage at the same rate as single-hulled tankers are scheduled to be phased out. The report notes that additional shipbuilding capacity may be provided within 6 to 12 months, but such a short-term burst in production will not be sustainable. In order to replace the single-hulled tankers eliminated by the 2003 phase-out proposed by the EU, current world shipyard output would need to increase by 36%, which would mean that the current capacity would be exceeded by 10%.

The current shipbuilding capacity is estimated to be around 26 million CGT (compensated gross tonnes) compared to the current production rate of about 21 million CGT. This gives an average capacity utilisation of 80%. Higher than average capacity utilisation is found in South Korea, China and Japan.

The report gives a comprehensive analysis of shipbuilding capacity in key shipbuilding countries.

The whole report is available on here.