A brief market assessment
The Impact of Covid-19 on the Construction Vessel Market
1st November 2019 - 30th June 2020
- The chaos caused by Covid-19 and oil price crashes has increased the importance of data and monitoring of the market to determine next steps for all industry players.
- An analysis of the past 8 months - i.e. from Week 44 in 2019 to Week 27 in 2020 - revealed that Covid-19 only had a minor effect on the total supply of construction vessels (CSVs) with a minimum 250t AHC crane and WROV on-board – also known as Capping Stack Vessels due to their capabilities of deploying heavy oil spill response equipment in an offshore emergency.
- In fact, lay-ups have remained fairly constant, with minor increases being in line with seasonal trends.
- In spite of the challenges caused by Covid-19, the number of committed vessels increased significantly since November 2019.
- CSV regional hotspots are the North Sea and North America – yet location does not predicate availability.
- Ratios of availability and committed CSVs vary by region to a great extent.
- Albeit challenges brought upon Covid-19, the North Sea's significance as a chartering hotspot has dramatically risen, as the ratio of available to committed vessels at the end of June 2020 lies at approx. 1:12.
- In the North Sea, availability of capping stack vessels fell by 62.5%, whilst the number of committed vessels have doubled in 35 weeks with approx. 35 CSVs committed at the end of June 2020.
- In comparison, it seems that North America has offered better odds for charterers for the same period, as the current ratio of available to committed vessels in North America lies at approx. 1:3 at the end of June.
- However, CSV availability has halved over the past 8 months in North America, highlighting a sharp increase in the number of working vessels within the region.
- Similarly to the North Sea, the amount of working vessels in North America has almost doubled over 35 weeks with approx. 19 CSVs committed at the end of June 2020.
- At the end of April, 2 construction vessels have been laid up in North America – in total, there are now 3 construction vessels laid up in North America out of 4 globally.
- CSV availability in West Africa has remained low with few CSVs available within the region.
How has the market changed?
- From the beginning of January 2020, the amount of committed capping stack vessels has increased by approx. 50 % globally amidst border closures, crew change challenges and a drop in oil price.
- Global availability has dropped by approx. 45% since the beginning of November 2019.
- CSVs have been increasingly subject to down-grading capabilities, as they are bid into a variety of requirements.
- Out of 12 marine regions, the North Sea has shown the highest increase in demand for CSVs.
- This has caused an increase in the CSV supply within the North Sea to meet regional demands.
- For example, approx. 20% of CSVs previously located in West Africa re-positioned themselves in the North Sea.
- Have we seen the peak of CSV supply in the North Sea yet?
Vessel movements over 35 weeks
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