2022 Cargo Review

The number of newbuilding orders for 2022 reflected global geopolitical concerns. as well as an increasingly prominent green agenda. The shift to cleaner  energy sources. energy security concerns. and the conflict between Ukraine and  Russia have all contributed to an increase  in the number and value of Gas carriers on the orderbook.

The Cargo vessels in this report  covers Containers,  Bulkers, Tankers and Gas (LNG and  LPG).

809  vessels were  added to  the orderbook in 2022. a  c.41% decrease  from  the 1,383 vessels ordered   in  2027.  Following  the extraordinary growth  in  the prices of vessels ordered  seen in 2021, values tailed off slightly in 2022 falling by c.7.4% to USD 87.9 bn. The 2022 figures  cannot compare to the staggering  increase of 124% in 2021  but have remained at high  levels..

As expected.  the large  majority of vessels ordered  in 2022 are to  be constructed  in yards  in China.  South  Korea and  Japan.  The  number of vessels confirmed in these three countries totals  769 with  417  in China.  275 in South  Korea  and  77 in Japan.  Other  notable  builders include  Vietnam  and  the  Philippines  with  31  and  9  vessels  ordered   in  these  countries respectively..

Tankers

Rates  reached  two  year highs during the third quarter of 2022, strengthening values across all  Tanker  sectors.  This  meant that the onus  was  on  vessels able to  trade  immediately, particularly older. more cost effective tonnage. As with Bulkers, Tanker newbuilding slots were harder  to come  by, with yards preferring to focus on the deluge of higher  priced  orders in the Container and  LNG  sectors.  spurred  by  booming earnings   in  both  markets.  Furthermore. many   owners  have  decided  to  wait  for   more   clarity  on   green   regulations  from   the International Maritime Organization (I MO) before  placing  new orders. resulting in a significant drop  in demand for Tanker  newbuildings  in  comparison  to 2027.  Low orderbook levels  and an ageing  fleet. on the other hand. should  support Tanker freight rates in the future.

Tanker newbuilding orders fell for the third year in a row from 198 in 2020 to 159 in 2027. Then. just 63 in 2022. a fall of c.60% YoY resulting in a total 2022 orderbook worth  USD 3.4 bn, down c.60% from  2027.  Despite considerably fewer  orders  being  placed  in  2022, Greece  remained the biggest spender in this sector.  accounting  for c.28% of the total. followed by Singapore with c.23% of orders. and Japan  ranking  third with c.17% of orders.

Headline orders:

• 6. December: 4 Suezmax  Tankers  (157,000  DWT, 2024-25, Times  New Shipbuilding) ordered  by TMS Tankers for USD 72 mil each

• 7October: 2 Aframax Tankers (115,000 DWT, 2024, DH Shipbuilding) ordered by Atlas Maritime for USD 64 mil  each

• 16.  September:  4  MR2 Tankers  (50,000  DWT, 2025,  Hyundai  Vietnam)  ordered   by Mitsui and Co for USD 42.75  mil  each

• 8.July:4 MR2 Tankers (50,000 DWT, 2024, Hyundai Vietnam) ordered  by Nissen Kaiun for USD 42.55 mil  each

Bulkers

Following on from  a very successful  year in  2021,  2022 saw a  much   more  moderate  market for Bulkers.  Despite a strong Q2. earnings  began  to trend lower in the second  half of the year as low demand from  China  and  global economic concerns put pressure on this sector. This sentiment.  coupled with  shipyard   orderbooks  already  at  capacity  with  high  ticket vessels such  as Container  and  Gas newbuildings.  translated  to  a  decrease  in orders  for  Bulkers  in 2022.

In  fact.  the number of  Bulker  newbuild orders  placed  dropped from  429  in  2021  to 199  in 2022. a  fall of 54% YoY,  resulting  in a  total  2022 Bulker  orderbook worth  USD 7.2 bn,  down from  USD 15.3  bn in 2021.  Chinese  owners continued  to  be the biggest spenders on Bulkers in 2022 with 52 orders placed. followed by Greece who  splashed  out on a total of 27 orders. Japanese  owners came  third with 19  new orders.

Compared  to  previous  year's  Bulker newbuild  activity.  there  has  been  a  distinct drop   in demand in 2022, however  this limited supply should  bode well  to support freight rates in the future.

Headline orders:

• 17. November: 10 Capesize Newcastlemax Bulkers (210,000 DWT, 2025-2026, Qingdao

Beihai Shipbuilding) ordered by Bocimar for USD 64 mil  each

• 2. November 2 Post  Panamax  Bulkers  (95,000  DWT, 2025, Oshima) ordered  by NYK Line for USD 130  mil  en bloc

• 18. March: 4 Handy  Bulkers (40,000  DWT, 2024, Jiangsu  Daijin  Heavy Ind) ordered  by

Vogemann for USD 116  mil en bloc

• 26. January:  Capesize  Newcastlemax  Bulkers  (210,000  DWT, 2024,  Quingdao Beihai

Shipbuilding) ordered  by Bocimar for USD 66 mil  each

LNG

The LNG sector saw a c.79% increase  in vessels ordered  YoY from  96 in 2021 to 172 in 2022, totalling  USD  31   bn.   Despite  a   marginal  increase   in  Gas  orders  overall.  the  value   of newbuilding orders  in 2022 soared  to USO 35 bn, over four  times the value of orders  placed

in  2020,  indicating  a   significant  firming  in  newbuilding  prices.  Soaring   demand  for  LNG carriers  is  being  fuelled   by a  global  push  towards green  energy  altern atives. W ith  LNG  having a  smaller carbon   footprint compared  to  traditional  hydrocarbons.  it  is seen  as a  promising transition  energy  source.

As a result.  newbuilding values  for  large  LNG  carriers  of 174,000  CBM  are up  c.26%  YoY from USD 205.74  mil  to USD 257.78  mil. Some  of the main market participants  have been  MOL.  NYK Line.  Global   Meridian  and   Knutsen  OAS  ordering  up  to  20  vessels  each  so  far  this  year. However. high  steel costs and  low yard  availability have also  led  to  increased   prices  for  LNG newbuildings  this year.

Over the course  of 2022, geopolitical  uncertainty has also had  an impact on  demand for Gas carrying  vessels.  LNG  values  have continued  to strengthen.  spurred   by skyrocketing  earnings that  have surpassed   last year's  record   breaking  peaks.  In  November.  LNG  rates  peaked   at a record   high  of 466.524  USD/Day from   the  Baltic  Exchange  BLNGlg  assessment.  pushing  up LNG  values. Demand for  LNG carriers  has increased exponentially this year due  to the energy crisis  in  Europe.  As   a   result.  the  EU   is  attempting  to   reduce   its  reliance   on  Russian  gas. following the conflict with  Ukraine. Demand for seaborn e  LNG  imports has surged  as Russia steadily cuts gas flows  from   pipelines. forcing  many  countries  in  Europe  to  turn  to  floating storage  units.

Japan   led  the way  in  terms   of 2022  LNG  sector investment.  knocking  Greece  from   the top spot. They take  the lead for  LNG  orders totalling 44 vessels. worth c.USD 6.5 bn an increase  of c.309%  YoY in terms  of value.

Headline orders:

• 21.  December:  2 Large  LNG  carriers  (174,000  CBM,  2026,  Hyundai  Samho  Heavy Ind)

ordered   by Asyad  Shipping  for  USD 250.39  mil  each

• 10.    November:   2  Large   LNG   carriers   (174,000   CBM,   2026,   Samsung)   ordered  by

Minerva  Marine  for USD 275.49  mil  each

• 28. April 6 Large  LNG  carriers  (174,000  CBM,  2025-2026,  Hudong Zhonghua) ordered by NYK Link  for  USD 200  mil  each

• 7.  January:   6  Large   LNG   carriers   (174,000   CBM,   2024-2026,   Hudong  Zhonghua)ordered   by MOL  for USD 796  mil  each

LPG

LPG orders fell  in 2022 with just 35 new  orders places. compared to 97 in 2027. a decline of c.64%. China  and Japan  both ranked  first. both with eight orders  placed  in 2022. Almost all Chinese  orders  were  in the VLGC sector. whereas  Japanese  investment was split between VLGCs and the full  press sector. Therefore. China  led the way in terms  of value. doubling their investment YoY to USD 870 mil  and  knocking South  Korea off the top spot.

Almost half of 2022 LPG orders are scheduled to be built in South  Korea. accounting for c.46% of orders. China followed second. accounting for c.35% of orders. the remainder of orders were placed  in Japanese  yards. accounting for c.79%.

Some  key market players who  have recently  placed  new  orders  include.  Evalend  Shipping who placed  five orders  for  LPG  carriers  over the course  of 2022, all scheduled to  be built in South  Korea.  Exmar placed  four  new  MGC LPG orders to be built in South  Korea. and  Pacific Gas.  who  placed  four  VLEC orders  that will  be built in China and  scheduled  for delivery  in 2025.

•  30November: 2 VLEC carriers (99,000 CBM, 2025-2026, Hyundai  Heavy Ind) ordered by lino Lines for USD 750.77 mil each

• 10.  February:  2 VLEC carriers  (99,000  CBM,  2025,  Jiangnan Shanghai   Changxing) ordered  by Wanhua  Chemical for USD 728 mil  each

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