Just 149 merchant ship orders (comprising bulk carriers, oil and products tankers and container ships) were placed in 2016, as shipbuilders in the powerhouse nations of China, Japan and South Korea saw a sharp drop in contracting, according to IHS Maritime and Trade newbuilding data assessing ships greater than 10,000 gt.

The total for the past 12 months compares with 1,094 orders recorded in 2015, and a peak of 1,568 orders in 2013.

China remained the top destination for vessel newbuilding orders in 2016, accounting for 43% of new orders seen. South Korea secured 27% of orders and Japanese yards secured 24%. Tankers took top spot at 40% of global orders with container ships coming in at 29%, bulkers 24%, and gas carriers 6%.

Chinese shipyards won 68 ship orders in 2016, down 82% year on year when they secured 379 and a 91% drop from the 788 vessel orders in 2013.

Only 21 individual Chinese shipyards recorded orders in 2016, compared with 47 in 2015 and 67 in 2013. Some 23 container ship were ordered in 2016, a decrease from the 132 box ships ordered in 2015. In 2016, bulker orders also pipped container ships at 25, although they were down from the 90 units ordered in 2015.

While shipbuilders in Japan and South Korea gained market share in 2015, new orders were dismal in 2016.

Japanese yards, which are renowned for constructing bulkers and stainless steel chemical tankers, have seen their dry bulk orders fall from a sustained level of around 260 new orders each year in 2013–15, to just 13 orders in 2016.

Across vessel types, only 11 individual Japanese shipyards recorded a total of 40 new orders in 2016, compared to 41 yards in 2015 with 483 orders.

Bulk carriers have formed the majority of Japanese new orders over the past few years, but the prolonged weak state of the dry bulk market has resulted in a low interest for newbuilding orders. The Baltic Dry Index’s fall to a historical low of 290 in February 2016 was certainly of no help to buying sentiments too.

In terms of tankers, South Korean yards have been maintaining their edge as the top destination for orders. However, as both the Baltic Dirty Tanker Index and Baltic Clean Tanker Index went on a continuous downward trend in the first three quarters of 2016 to levels last seen in 2009, tanker orders at South Korean yards fell to just 32 units in 2016, down from 137 units in 2015, according to IHS Maritime and Trade newbuilding data.

Across vessel types, only six individual South Korean yards recorded a total of 43 new orders in 2016, versus 11 yards with 232 orders in 2015.

Shipyards are likely to remain under pressure this year, with Chinese shipyards now facing the added challenge of higher steel prices. However fewer orders should help restore balance in the shipping market given current vessel oversupply.