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Monday, August 03, 2009

New ship prices to go down in H2

Monday, 03 August 2009

According to China Association of National Ship Industry, new ship prices still have spaces to go down in H2. The association predicts in its lately released Ship Industrial Performances in H1 of 2009 that ship industry is impossible to creep out of the downturn in short time due to the lack of effective demand and the cut in shipbuilding costs.
Mr Tan Naifeng deputy director of the information branch of CANSI said it’s confirmed that new ship prices will tend down, though the degree is uncertain to estimate. He said that ship owners are unlikely to buy new ships, as long as their fleets cover the demand against the backdrop of un-recovered real economy.
Mr Bao Zhangjing chief researcher of China Ship Marketing Research Center agrees with Mr Tan opinion and he tells to Caijing.com that overcapacity and scant demand hit present ship industry; under the situation, shipbuilders will mark down prices to grab new ship orders.
According to the undercount of Clarkson, the world accumulatively traded 80 new ships of 3.39 million DWT in H1 down by 96.8%YoY excluding the 30 new ship orders of 4.12 million DWT undertook by Zhoushan Jinhaiwan Shipyard Co Ltd.
Mr Bao adds the shipbuilding cost which mainly consists of expenditures in steel products, ship associated facilities and labor, presents large shrinks, since steel prices go down largely from last year, so do the prices for ship fittings, and manpower cost also fall due to the financial crisis. Bao thinks the decreasing shipbuilding cost will provide more spaces for new ship prices to move down.
The statistics of China Iron & Steel Association show that steel prices dropped since Q4, 2008 and touched the bottom in April 2009. Then, the prices rebounded, but still lower than the level in end 2008.

Source: MySteel.net