Internationally is there spare shipyard capacity?
AI Overview
Internationally, there is currently
very little spare capacity in the major shipbuilding markets, with the sector experiencing significant constraints and bottlenecks, particularly in high-demand segments like liquefied natural gas (LNG) carriers and large container ships. While active shipyards increased by nearly 18% between 2022 and 2024—driven largely by China—global capacity remains roughly 30% below the peak seen in the late 2000s, leading to long delivery waiting times, with some slots booked out to 2029 or 2030.
Key details regarding global shipyard capacity:
- High Utilization & Backlogs: Global yard utilization is approximately 70%, with top-tier yards, particularly in South Korea and China, operating at extremely high capacity.
- The "Big Three" Dominance: China, South Korea, and Japan account for about 93% of the world's shipbuilding tonnage.
- Chinese Expansion: China is the primary driver of new capacity, with 11 shipyards announcing expansions in 2024, utilizing a surplus of labor to increase production.
- Bottlenecks & Pricing: Strong demand, combined with limited space, has driven newbuilding prices to historic highs.
- The U.S. Situation: The U.S. commercial shipbuilding industry has experienced a near-total collapse, with only a few active yards and almost no capacity for international commercial orders.
- Future Outlook: While some argue that overcapacity persists in lower-tier, non-specialized yards, the overall market is facing a supply-side squeeze, with retired capacity potentially needing to be brought back online to meet green energy regulations.
Despite the tight market, some analysts have argued that a significant portion of shipyards, particularly those not focused on LNG or container ships, are operating at lower utilization rates, suggests a "lopsided" rather than absolute lack of capacity across all vessel types
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internationally is there spare shipyard capacity for OSVs
AI Overview
Internationally, there is currently
very limited spare shipyard capacity for new Offshore Support Vessels (OSVs). The global market is experiencing a severe supply crunch driven by a decade of low investment, an aging fleet, and shipyards that have shifted their capacity to other vessel types, such as offshore wind support, larger tankers, and containerships.
Key findings on the current state of OSV shipyard capacity:
- Stretched Capacity & Long Wait Times: Major shipbuilding hubs in China, Europe, and Southeast Asia are occupied with other projects. Shipyards are reporting that slots for new OSV construction are largely unavailable until 2026 or even 2028.
- Reallocated Capacity: Many yards that previously built Platform Supply Vessels (PSVs) and Anchor Handling Tug Supply (AHTS) units have converted to building offshore wind vessels, fishing vessels, and other specialized tonnage.
- Newbuild Shortage: Despite a strong rebound in demand for OSVs due to increased oil and gas exploration (particularly in Brazil and the Middle East), new capacity entering the market is limited.
- Regional Constraints:
- China: While Chinese yards are seeing some reopening of older facilities, most capacity is focused on larger vessels.
- USA: The US faces a severe shortage of shipyard capacity for both new builds and repairs, with some estimates suggesting the industry is 20 years behind in necessary maintenance.
- Brazil: Significant demand for newbuilds is driving plans for new yards, but current immediate capacity is tight.
Market Outlook:
Because of the lack of shipyard slots, the industry is seeing a sharp increase in day rates and a tightening resale market for existing vessels. While some new orders were placed in 2023 and 2024, they are not expected to alleviate the tight supply until 2026-2027.
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in canada is there spare shipyard capacity for OSVs
AI Overview
Based on current National Shipbuilding Strategy (NSS) commitments, major Canadian shipyards have very limited, if any, immediate capacity for new, large-scale Offshore Support Vessel (OSV) construction, as they are fully booked with federal fleet renewals through the 2030s and 2040s
. However, smaller shipyards and niche builders may have capacity, and the industry is investing in expanding its capabilities.
Here is a breakdown of the capacity situation for OSVs in Canada:
Large Shipyard Capacity (NSS Partners)
- Seaspan’s Vancouver Shipyards (VSY): Heavily occupied with construction for the Canadian Coast Guard (CCG) and Royal Canadian Navy (RCN), including the Offshore Oceanographic Science Vessel (OOSV) and upcoming Multi-Purpose Vessels. VSY has noted new-build capacity for large vessels potentially starting around 2027.
- Chantier Davie (Quebec): Now confirmed as the third strategic partner, they are focused on building 6 program icebreakers, a polar icebreaker, and ferries. While capacity is increasing, they are prioritized for large federal projects.
- Irving Shipbuilding (Halifax): Focused on the Arctic and Offshore Patrol Ships (AOPS) and the Canadian Surface Combatant program, with work extending for decades.
Overall Market Outlook
- No Immediate Capacity: Shipyard professionals globally, including in Canada, have noted that shipyards are occupied with existing projects and lack immediate, short-term capacity to build new OSVs/PSVs.
- Alternative Capacity: Smaller, non-NSS shipyards across Canada may have capacity for smaller OSVs, and the Ontario government is investing in its shipbuilding sector to improve capacity and competitiveness.
- Maintenance vs. New Build: While new build capacity is scarce, some shipyards (e.g., Victoria Shipyards) are actively involved in maintenance and repair, providing capacity for vessel life extensions.
For specific, immediate OSV construction needs, it is likely that Canadian capacity is booked, requiring either waiting for future, post-2026/2027 availability or utilizing smaller, non-strategic yards.
