chinese shipbuilding
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2013-04-19 10:03:56

China is leading the jack-up drilling rig newbuilding market by winning more orders than Singapore.
According to OCBC Bank Singapore, Chinese shipyards have contracted overall $2.3bn of jack-up orders year-to-date, comparing with $2.1bn orders for Singaporean rivals.
OCBC said Shanghai Waigaoqiao Shipbuilding has booked the largest rig orders in China.
The bank pointed out that many of owners who placed orders at Chinese shipyards are speculators and have been attracted to favourable payment terms from China.  
Also, lacking rig building experiences than Singaporean builders, Chinese shipyards seem to gain less profitability, however, it will strengthen up by accumulating experiences.

2013-04-15 09:42:44

According to the report “Global Marine Trends 2030” jointly issued by LR, QinetiQ and University of Strathclyde, China will be the biggest beneficiaries of global shipping by owning over one third of global shipping capacit. Meanwhile, China will be the absolute leader of global shiipbuilding by winning about 28.0m to 32.0m GT new orders more anuually. The future sees so bright while the current situations are a little anxious.
In the firist quarter  newbuilding market has shown mild improvement against the same period of last year, however, global shipbuilding industry still stagnate in the winter season while the new spring has walking closer in China.
Since the beginning of last year, the lagged effects on China shipbuilding has been more and more prominent with new order, orderbook and newbuilding output all decline greatly year on year. Shipyards are began to confronted with delivery dilemma, new order drought and poor margins. Its it estimated that over 300 shipbuilders in China has seen a loss in last year, climing by 150% against last year.
In the past few golden years, China has surpassed Korea and Japan as the leading shipbuilder country globally with three shipbuilding indices topping No.1. However, why “world No. 1” fail to generate profits for ship enterprises?
We think the problem lies in product structure. Chinese shipyards mostly center on major ship types such as bulker, ore carrier and containerships, which are vulnerable to ship fluctuations. Once the shipping market goes down, the profits for shipbuilders will be greatly stricken.
In fact, the global shipbuilding market has been profound changes while we are celebrating our “world No.1”. With global economy development, stricter standards and emerging new technologies, world’s demand has turn to high-tech, high value-added vessels such as LNG carriers, special ships and offshore plants. Besides, the importance attached on green design, safety and environmental friendliness has been much more higher nowadays.
On the other hand, Japan and Korea have walked earlier and faster on the way of developing new technology after master market changes. Japanese shipyards have successfully developed some eco-design, high value-added ships while Korean and Singapore shipbuilders have occupied over 50% of global offshore market. All of them are in better conditions than our China shipyards.
Chinese shipyards would have to change the wheel for their voyage for current survival and long-term development. On one side, shipyards should change product structure and realize transformation by developing technologies and strengthening innovation. On the other side, shipbuilders should choose there right products according to their advantages and grow as the leader of segment market.
As usual, difficulties always brews more opportunities. More ship enterprises and design institutes are trying to find new cooperation partners in the recession. It is a good opportunity for Chinese shipbuilders to enhance independent core technology by the cooperation with advance ship companies in America and Europe.
Diversified development is another way for Chinese shipyards in market downturn. They can take advantage of their competitiveness in equipment manufacture to develop multiple business.
China still has a long and bumpy way to go to become the real No.1.

2013-04-12 10:33:42

New order intakes of Chinese shipbuilding industry for the first two months in 2013 showed a slight rise against the same time period last year.
According to Northeast Securities of China, China’s newbuilding deliveries in January and February were reported to be a combined of 5.69m dwt, down by 20.9% against the same period of 2012, however, it showed a 1.9% increase in new orders to be 5.03m dwt. As of the end of February, an orderbook of Chinese shipbuilders was a total of 106.29m dwt which represents a fall by 27.4% from the same period last year and 0.6% of decrease against the end of 2012.
Newbuilding prices in January and February suggested by three countries, Korea, China and Japan, generally stayed at the similar level and thick plate prices has shown an increasing move since last December.
As for major new orders contracted in offshore segment in February, China’s Dalian Shipbuilding Industry (DSIC) put pens on a contract for $460m worth of two jack-up drilling rigs with two options with Norway’s Seadrill in a Heavy-Tail payment.
Meanwhile, COSCO Shipyard Group won a semi-submersible drilling platform from Singapore’s Energy Drilling.

2013-04-07 13:24:48

While China’s listed shipbuilders continuously released 2012 annual reports mostly with plummeted earnings, showing a recession trend, stock prices of shipbuilding and related corporations increased by 1.98% on April 3, after hearing that many of government ministries of China are planning to release the action plan in shipbuilding industry for the latter three years of China’s 12th five-year development plan.
In 2012, Chinese shipbuilding industry saw an economic index decline and a total amount of ship exports fell for the first time in 30 years. Moreover, some small and medium sized companies were under a threat of bankruptcy that the industry has confronted the most serious situation since the global economic crisis.  
Accordingly, Chinese government has decided to release a policy regarding an active support for the development of domestic shipbuilding industry that it will encourage acquisitions and mergers among related corporations, lessen an oversupply and improve industrial concentration. Furthermore, it will enhance the ability in overall offshore development and urge for the usage of Chinese-built equipment and so on to push forward establishing complementary industrial cluster.
Recently, as not a few shipbuilding-related corporations have faced a “financial difficulty”, the government plans to offer a substantial financial support on the issue as well.
Moreover, last year, Korean and Japanese shipbuilding industries’ succeeded in creating profits in greenship, reinforced with energy-saving, safety and eco-friendly features, offshore facilities and high-specification & high-value vessel segments. Considering this, China, also, is to aggressively spur into R&D of its core technology, planning to advance into high-value, eco-friendly ships and deep-sea offshore sectors.  
According to statistics from almost the whole industry, new orders to be placed at Chinese shipbuilding industry are expected to be on the increase this year by a fixed quantity, against the previous year. China’s Shenyin & Wanguo Securities, also, has anticipated that new orders to be won in 2013 will be more than last year’s as global newbuilding orders begin to grow, comparing with the same time period of last year.

2013-03-11 14:41:59

Shipbuilding industry in Jiangsu province is reported to still have showed a low level of newbuilding orders in February, 2013.
Accordingly to data released on March 4 from Jiangsu Economic and Information Technology Commission of China, shipbuilders in the region are said to win not many orders in the full month of February and they are still struggling.  
As a representative region for maritime economy in China, Jiangsu province attributes lack of orders to global decrease in newbuilding order due to a protracted slump in shipping industry.

2013-03-11 14:18:29

Zhoushan city of China was reported to have shown a surprising surge in newbuilding orders in January and February, 2013.  
According to a local industry source, shipbuilders in Zhoushan are said to win orders for up to about 60 vessels of more than a combined 1.8mDWT in the first two months of this year.  
Especially, of which, proportions for offshore vessels/facilities and high value vessels took somewhat a large part of total.
For instances, COSCO (Zhoushan) Shipyard was awarded orders for four Platform Supply Vessels (PSV) with one offshore Pipe-laying Vessel and one 150,000DWT shuttle tanker while Sinopacific Offshore & Engineering won $250m worth of one offshore supply platform and Zengzhou Shipbuilding was placed an order for CNY 400m ($60m) worth of two 6,000㎥ suction dredgers.

2013-03-11 09:17:27

Last year South Korea lost its decade long battle with China to retain its lead in ship building. Because of a five year depression in the world market for shipping, South Korean ship exports fell 30 percent last year, to $37.8 billion. China, helped by government subsidies, saw ship exports fall only 10.3 percent, leaving China with $39.2 billion in export sales. The Chinese government has also been giving its ship builders lots of new orders for warships, which made its yards more profitable and better able to beat South Korea on price. The Chinese government also provides its ship builders with more loans, allowing the builders to offer better credit terms to customers. South Korea is still ahead of China in total orders for ships. As of last year South Korea had 35 percent of these orders versus 33.3 percent for China.
China has been helping its shipyards for over a decade and that has enabled Chinese ship builders to gradually catch up to South Korea and Japan. It was only four years ago, sooner than anyone expected, that China surpassed South Korea as the world's largest shipbuilder in terms of tonnage. In late 2009, Chinese yards had orders for 54.96 million CGT of ships, compared to 53.63 million CGT for South Korea. Thus China had 34.7 percent of the world market. In 2000, South Korea took the lead from Japan by having the largest share of the world shipbuilding market.
CGT stands for Compensated Gross Tons. This is a new standard for measuring shipyard effort. Gross tons has long been used as a measure of the volume within a ship. CGT expands on this by adding adjustments for the complexity of the ship design. Thus a chemical tanker would end up with a value four times that of a container ship. China is producing far more ships, in terms of tonnage of steel and internal volume, than South Korea, mainly because a much larger portion of Chinese ships are simple designs. South Korea has, over the years, pioneered the design, and construction, of more complex ships (chemical, and Liquid Natural gas carriers.)
Note that deadweight tons measure the actual weight of everything carried in the ship, including supplies, miscellaneous equipment, fuel, and even crew, expressed in long tons: As a rule for every 1,500 deadweight tons a cargo ship could carry about 1,775 measurement tons. Warship tonnage is measured differently, in terms of "displacement tons." Each cubic meter (35 cubic feet) of sea water displaced by the vessel is a "displacement ton." As that volume of sea water actually weighs approximately one long ton, displacement gives a rough indication of the actual weight of the vessel.
China has invested much money and effort into expanding its merchant shipbuilding industry, as a way to improve its warship building capability. Seven years ago, China produced about a quarter of the world's merchant shipping, while South Korea was in first place, producing about a third. It was then believed that China would take first place in the next 5-10 years.
The big thing holding China back in the warship building area has been the shortage of skilled personnel. By encouraging merchant shipbuilding, the government creates experienced ship builders for the more complex task of building warships. In most cases, merchant ships are larger than warships, and much less complex. For example, a common type of merchant ship is the VLCC (Very Large Crude Carrier) of 300,000 deadweight tons (DWT). This is the largest size tanker that can use the Straits of Malacca to carry oil from the Persian Gulf to East Asia. These ships haul over two million barrels (about 290,000 tons) of oil per trip. These ships are larger than the biggest American aircraft carriers (like the Nimitz class that are 110,000 tons displacement, and nearly 354 meters/1,100 feet long.)
The major difference between merchant vessels and warships is what equipment they have. Merchant ships are quite basic and plain. A 300,000 DWT VLCC is about the same size as a Nimitz class carrier, but costs much less to build ($130 million for the VLCC, versus over $4 billion for the carrier). Actually, it costs more to run a carrier for one year, than the VLCC costs to build. Part of that has to do with crew size, with the carrier having a hundred sailors for everyone needed to run the VLCC.
By building all those merchant vessels, China has acquired the ability to build the basic warship hull. Where it has big problems is in creating the complex electronics, mechanical systems and weapons needed to make a warship work. China is making progress there as well, but not nearly as much as it has in the ship building area.
China grabbed the lead in market share for commercial shipping partly because it became more difficult for South Korean builders to expand. There were more restrictions on land use in South Korea, in addition to higher labor costs. South Korean builders, seeing that they could not match the expansion of Chinese ship yards, expended more effort on building more complex, and expensive, ships. Japan was following a similar path when it lost the lead to South Korea a decade ago. China also gained more market share by offering generous loan terms to foreign buyers of Chinese ships, and cheap loans for their own shipbuilders.

2013-03-01 09:36:27

Korean shipbuilders were outperformed by their Chinese competitors in exports last year, 11 years after Korea in turn overtook Japan in 2001.
The Korean Chamber of Commerce and Industry said analysis of data from the Korea International Trade Association puts exports by Korean shipbuilders at US$37.8 billion in 2012, compared to China's $39.2 billion.
The change is due to the fact that Korea was more affected by the global downturn than China. Korean shipbuilders saw exports decrease around 30 percent on-year in 2012 while their Chinese and Japanese rivals posted drops of only 10.3 percent and 14.6 percent.
The shipbuilding industry has been one of Korea's mainstays. Since the mid-2000s, it enjoyed a boom and grew to post $54.1 billion in exports in 2011. But China has lately been putting up strong fight. Korea managed to edge slightly ahead of China in terms of global orders last year, when it accounted for 35 percent compared to China's 33.3 percent.
Industry insiders cite Chinese government support as the reason for the rapid growth of Chinese shipbuilders despite shortcomings in technology.
The KCCI in a report to the Ministry of Strategy and Finance called for support from the banking sector to overcome the current slowdown. It said such support is all the more necessary because of a shift in payment practices. Before, the total price was paid in five installments of 20 percent each time until delivery, but now only 40 percent of the total price is paid in four installments during manufacturing and the remaining 60 percent on delivery.

2013-02-18 11:14:53

As global shipping industry see growing deficits, which has caused serious damage to the shipbuilding industry, several institutes and associations, such as the Ministry of Industry and Information Technology of China (MIIT), are said to have negative lookouts on Chinese shipbuilding industry.

MIIT has announced at the end of January that a total amount of delivery by the Chinese shipbuilding industry in 2012 was 60.21m DWT, showing 21.4% decrease year-on-year, with 20.41m DWT of newbuildings contracted which have fallen by 43.6%. Also, China’s newbuilding orderbook marked 106.95m DWT last December with 28.7% fall compared to a year earlier and of the total, vessels for export turned out to have accounted for 82.7%.

Moreover, China Newbuilding Price Index (CNPI) has been on a steady downward curve since July 1st, 2011 when it made its first announcement of the index. Particularly, dry bulk price index has fallen continuously by 15% from 1,000p and finally recorded 841p on December 30th, 2012.  An official from the company has pointed out that the industry has faced a serious hardship due to a fact that proportion of bulker building takes around 70%.

Meanwhile, Zhang Shou Guo, executive vice chairman of the China Shipowners’ Association, has said that he does not think 2013 will be better than 2012 and the Chinese shipyards will experience even a harder time in 2014. Also, Yangzijiang Shipbuilding’s chairman Ren Yuanlin has expected that this year is a starting point for the shipbuilding industry to face a hardship and thus, it will be difficult to come out of recession for the next five years. Another professional in the industry is said to have forecasted that around 50% of the Chinese shipyards will go into bankruptcy within the next two or three years.

2013-02-06 09:37:40

According to statistics published by the Ministry of Industry and Information Technology recently, completion volume of China's shipbuilding amounted to 60.21 million DWT in 2012, down 21.4 percent year on year, and new shipbuilding order quantity was 20.41 million DWT, down 43.6 percent year on year. The sharp shrinking, about 20 percent reduction of order completion and more than 40 percent decrease of new orders, reflects the difficulty of the shipbuilding industry in 2012.
As a matter of fact, the shipbuilding industry was the first to feel the chillness in as early as 2008. At that time, with the sluggish global ship market and the impact of the European Debt Crisis, most Chinese shipbuilding companies suffered significant order reduction and price cut. According to the latest statistics published by the Ministry of Industry and Information Technology, as of the end of December 2012, quantity of orders in process was 106.95 million DWT, 28.7 percent lower than that at the end of 2011; of the order, 36 million compensated gross tonnages were seagoing vessels, and export vessels accounted for 82.7 percent of total.
The shipbuilding industry is an important part of the real economy, directly linked to the development of such key industries as iron and steel, petrochemical, equipment manufacturing, and electronic information. In 2012, judging from the development of the 20 major industries of China's real economy, production of raw materials industries, including iron and steel, nonferrous metals, construction materials, and chemicals, remained anemic, overcapacity stood out, and some industries were on the edge of loss. With the impact, as well as the continuous depression of the international shipping market, transaction volume of new ships in the international shipbuilding market has continued to shrink up till now. Besides, a great deal of the orders of China's shipbuilding companies come from Greece and other countries and regions that are heavily stricken by the European Debt Crisis, and the quantity of many company's international orders has dropped sharply.
In 2013, as there are less orders in hand, shipbuilding enterprises will compete more violently for new orders, which would force ship price to go further downward. Although the global economy can be expected to hit the bottom in 2013, excessive shipping capacity may stand in the way of new order recovery. Leading enterprises in China have also felt the huge pressure. In their views, the shipbuilding industry is almost hitting the bottom now; there will be a reshuffle across the industry, and half of the world's shipyards may go bankrupt, shut down, or be merged.
There is still a long way to go before the shipbuilding industrial chain can restore its vitality. Until then, policy support and guidance will be the main driving factors. The central economy work meeting held recently proposed to make full use of the reversed pressure mechanism formed during the international financial crisis to solve the problems of excessive production capacity. It is told that numerous government ministries and commissions are studying and formulating the Action Plan of the Shipbuilding Industry in the Last Three Years (2013-2015) of the 12th Five-year Plan. The government will provide support to key enterprises in such aspects as finance, banking, and tax.
Meanwhile, construction of marine economy demonstration areas across the country will also bring more opportunities to the shipbuilding industry. The publishing of the Development Plan of Shandong Peninsular Blue Economic Zone, Planning of Zhejiang Marine Economy Development Demonstration Area, and Development Plan of Guangdong Marine Economy Comprehensive Experiment Area will vigorously boost the development of China's marine economy and create new opportunities for the development of the shipbuilding industry. Also, the establishment of China Development Bank's Shipping Finance Center is also regarded as a major beneficial factor. It is CDB's first head office business department that provides support to a specific key industry. CDB will make use of this shipping finance center platform, adopt mid- to long-term financing and investment approaches, and give play to the unique advantages of development financing to boost the development of China's shipping and shipbuilding endeavors.
Industrial insiders suggest that the government has made it clear to increase support to the development of key industries during the 12th Five-year Plan, and the prosperity of the marine economy will present new market opportunities for the diversified operation of the shipbuilding industry. Demand mix of China's shipping market is changing, and there will be demands of certain sizes for LNG vessels and marine engineering equipments, eco-friendly vessels and special-purposed vessels, ocean fishing vessels, and large coastal and inland waterway vessels. Shipbuilding enterprises should grasp the opportunity of the bottom adjustment of the industry, improve independent innovation, develop new products that meet market demands, promote industrial reshuffle, and get ready to set sail once again.

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