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New orders declined sharply in the first few months of 2025, reaching historically low levels, as shipowners avoid long-term investment decisions. The subdued ordering activity will persist until at least October 2025, with only a gradual recovery anticipated thereafter. A more substantial rebound in new orders is likely to materialise from 2028.

Uncertainty in the trade outlook has been growing due to geopolitical disruptions and ongoing tariff wars combined with increasing concerns over China-made ships and uncertainty with respect to global regulatory environments, including the IMO’s Net Zero Framework (IMO NZF). Therefore, we expect new orders to remain muted until October 2025 with a slow recovery expected after the IMO session in October (if adopted); nonetheless, ordering activity is expected to be below historical levels until 2027 when the IMO will make clear incentives for ships employing Zero or near-Zero (ZNZ) fuels and technologies.

Figure 1: Dry bulk new orders

Source: Drewry Maritime Research

How are tariffs and USTR proposals delaying new orders?

Uncertainty caused by US tariff wars has the potential to disrupt global trade flows, making future demand for shipping unpredictable. This volatility has discouraged shipowners from placing new orders, as long-term returns become unclear.

Moreover, the threat of potential restrictions on ordering vessels at Chinese shipyards remains a key concern—at least through the next six months, until when the US government has temporarily suspended the USTR's suggestion of levying fines. Such uncertainty has left many shipowners on the sidelines, hesitant to commit to new investments.

China has long dominated global shipbuilding, including dry bulk vessels; more than 75% of these vessel new orders in 2024 were placed at Chinese yards. The share of Chinese yards, however, has come down to 40% among all dry bulk orders placed so far in 2025, as shipowners have become increasingly cautious. The US administration's contemplation of sanctions on China-built, -operated or -owned ships added a strategic uncertainty that few shipowners feel comfortable with. While a final resolution on these measures has been put on hold, the threat itself has been enough to result in a dramatic retreat in order placements at Chinese yards.

Figure 2: New orders yard locations

Note: 2025 orders are until April 2025.
Source: Drewry Maritime Research

Owners holding on placing new orders in anticipation of softening newbuilding prices

Since newbuilding prices are already high, owners anticipate a possible softening. Moreover, orders placed at Japanese yards cost almost 5% more than those at Chinese yards. This price disparity is especially challenging in today's high newbuilding cost environment with the added expense of shifting away from Chinese yards further contributing to the decline in new orders. Shipowners seem content to hold out before agreeing to more expensive deals in the face of this uncertainty.

Figure 3: New orders vs Newbuilding price

Source: Drewry Maritime Research

Ambiguity on regulations puts the brake on new orders

Underlying the slowdown in new orders is a far greater and more fundamental uncertainty—the regulatory evolution overhauling the shipping industry. Shipowners are worried about uncertainty around future environmental compliance requirements. The scheduled IMF NZF meeting in October 2025 could offer some clarity towards establishing a global carbon pricing mechanism. However, we believe new ordering will only gather momentum after 2027 once emissions penalties are clearly defined, enabling shipowners to make informed decisions on engine and fuel choices.

Conclusion

A number of factors such as high newbuilding prices, USTR proposal, trade uncertainty and regulatory ambiguity have resulted in a sharp decline in new orders so far in 2025. However, clarity on the regulatory framework will primarily determine the pace of new orders. While clearer direction on USTR or US tariffs may support some recovery in ordering towards the end of this year, a well-defined regulatory framework will drive sustained new orders.