The global container ship order book grew in October for the first time since July 2008 as new orders outpaced deliveries.
The cellular container ship order book on Nov. 1 stood at 3.79 million 20-foot equivalent units capacity, or 26.6 percent of the current fleet, according to Alphaliner, a Paris-based industry consultancy.
This was marginally higher than the 3.73 million TEUs in the order book a month earlier following a slowdown in deliveries of new vessels and a flurry of new contracts placed in October.
By The Numbers: New Shanghai Containerized Freight Index.
Vessel deliveries totaled 92,000 TEUs in October, the lowest monthly total since February, and likely will decline through the fourth quarter, Alphaliner forecast.
Contracts for new ships reached 131,000 TEUs in October and further orders are expected to be signed before the end of the year.
Alphaliner said there is significant latent demand for new ships as owners rush to place new orders after two years of inactivity.
The order book has been in continuous decline since it peaked at 6.89 million TEUs in August 2008, due to a combination of poor market sentiment and a lack of funding.
"This situation only started to change in June, as the recovery in the freight markets prompted carriers and some non-operating owners to return to the yards," Alphaliner said.
The order book is unlikely to return to the peaks of 2007 when it was equivalent to 64 percent of the global fleet, but will remain in the 25-30 percent range if owners and carriers maintain their current level of interest.
The growth in container ship supply in 2011 and 2012 is expected to come close to the 9.6 percent forecast for 2010.
The supply-demand balance remains delicate and any slowdown in cargo demand will cause a return of excess supply, Alphaliner said.
Demand in 2011 is unlikely to match the 12.5 percent growth rate in 2010, with current fourth quarter growth levels considerably lower than in the first nine months of the year.
The fourth quarter growth rate will give a better indicator of demand through 2011, according to Alphaliner.
-- Contact Bruce Barnard at firstname.lastname@example.org.