The price of steel, a key component in shipbuilding, has been on a downward trend over the past four years. Despite this, however, ship prices remain at high levels, as consecutive order placements between 2020 and 2024 strengthened the negotiating power of shipyards against shipowners.
Although shipyards have slightly reduced their prices—a result of the lower orders for newbuilds in the first half of 2025 compared to previous years—newbuild prices continue to break records, a sign of the explosive rise in orders in previous years. Nevertheless, according to Drewry, if the number of orders—for each ship type—does not recover from the low level it is currently at, newbuild prices may chart a downward trajectory.
Clearly, prohibitively high prices are one of the main reasons for the sluggishness that has characterized the newbuild market recently, but there are other equally significant factors discouraging shipowners from committing to long-term investments in newbuilds, Drewry notes. Among these are tariffs, geopolitical tensions, and other factors affecting trade flows, which are served by maritime transport.
Finally, Drewry attributes the reduced demand for newbuild ships to yet another factor: the IMO’s policy on shipping decarbonization, the Net Zero Framework, which makes shipowners’ investment decisions even more complex.
