New Ship Orders Slump Amid US-China Tensions and IMO Vote
Shipbuilding Orders Plummet Amid Global Uncertainty
New ship orders have reached a historic low in early 2025 as shipowners hesitate to commit to long-term investments due to rising global uncertainties. Key factors influencing this decline include potential U.S. trade restrictions on vessels built in China and the upcoming International Maritime Organization (IMO) vote on its Net Zero Framework. According to consultancy Drewry, these issues are significantly impacting order volumes in the maritime industry.
Trade Restrictions and Regulatory Uncertainty
The U.S. administration is contemplating measures that could restrict or penalize ships constructed at Chinese shipyards, which have historically dominated the dry bulk construction market. Although the United States Trade Representative (USTR) has postponed a final decision, the mere possibility of such restrictions has already affected order volumes. In fact, China’s share of dry bulk orders has plummeted from over 75% in 2024 to just 40% so far in 2025.
Compounding the situation are high newbuilding prices and a 5% cost premium associated with Japanese shipyards. This financial burden is particularly challenging for shipowners who are considering moving away from China due to geopolitical risks. The uncertainty surrounding trade policies is forcing many to delay their newbuilding plans, as they weigh the potential costs and benefits of investing in new vessels.
In addition to trade concerns, shipowners are also awaiting clarity on regulatory matters. The IMO is set to vote in October 2025 on its Net Zero Framework, which could introduce global carbon pricing and establish incentives for vessels utilizing zero- or near-zero-emission fuels. Until these regulations are finalized, shipowners face uncertainty regarding engine and marine fuel choices, as well as potential future compliance costs.
Drewry anticipates only a gradual recovery in new orders following the October vote, with a more significant rebound expected around 2027, once both trade and climate regulations become clearer. As the maritime industry navigates these turbulent waters, shipowners remain cautious, prioritizing stability and clarity in their investment decisions.
