Wednesday, June 17, 2009
Chinese new ship orders dwindling
Wednesday, 17 June 2009
The throes of overcapacity will come earlier in 2010 to China ship industry, experts anticipate, since trades of new ship orders fall into halt, expected to be less than 10m tons this year, and the existing orders keep shrinking quickly for over 7 months. And the growths of ship industry decline largely, China Industry News learns from China Association of National Ship Industry. The following table shows the January to April gross value of ship industrial outputs:
The 1774 shipbuilders realized CNY 75.4 billion exports in the first four months up by 28.9% with the growth declined 37.2 percentage points from that of last January to April. However, figures of China 70 key shipbuilders kept growing during the same period. And they are hopeful to survive the crisis as they owned lots of orders.
CANSI points out five challenges before present ship industry in China.
1. The existing orders continue shrinking mainly because of halted new orders, quick completion of ships and order cancellations. Till the end of Apr, China key ship yards held orders of 165.59 million DWT down by 1.4% from March or 3.4% from January.
2. The postponement of delivery and the order cancellations gradually spread over in China, weighting on shipbuilders and ship equipment manufacturers. As per statistics of CANSI, key shipbuilders eyed 28 ships of 1.15 DWT cancelled in January to April 12th ships of 0.25 million DWT more than January to March. It’s said that ship owners chose to do that since shipping prices hung around the floor, bringing in poor profits and the overcapacity in global shipping powers existed hurting the shipping prices and new ship demands.
3. Ship owners still try to negotiate on lowering new ship prices, putting off delivery or payment and altering payment modes or ship types with shipbuilders.
4. Commercial ships built without orders swelled in Jiangsu and Zhejiang, creating series of social worries. As learned, there is CNY 1 billion civilian capitals tied with those ships.
5. Ship repairs present great decrease. In January to April the number of ships arrived at China largely decreased, sharply squeezing the businesses of ship repairs. As per January to April statistics, key ship repairers finished value of CNY 5.1 billion down by 27.2%YoY including export value of CNY 4.5 billion down by 21.7%. Meanwhile, they refitted 25 ships of 1.04 million DWT appearing great decline from last period.
CANSI predicts that demands for oil tankers, bulk carriers and container carriers will be very few in the following months, and there only a bit of special ships will come. In Addition, prices for second hand and reselling ships are much cheaper than those of new ships, absorbing more and more ship owners who still need ships.
Experts think that during January to April, key shipbuilders received 0.64 million DWT of new orders down by 96%YoY however, completed ships of 7.06 DWT up by 54%YoY the halted new orders and the fast finished ships will shorten the narcosis and pains will be felt soon in 2010 for China shipbuilders.
Source: Steel Guru
