China yards see 770% surge in new orders
China Association of the National Shipbuilding Industry says the volume of new orders China"s shipyards bagged in the first two months of this year soared 770% year-on-year to 5.7m dwt from 660,000 dwt in the corresponding period last year.
Despite the new order spike, the association said the shipbuilding industry had not returned to normal levels, given that completion volumes significantly exceeded new order volumes.
In the first two months of 2010, completion volume at China"s shipyards increased 168.4% year-on-year to 9.2m dwt from 3.4m dwt in the same period in 2009, accounting for 46% of total global completion volumes. Total order books for the country"s shipyards dipped 0.6% year-on-year to 186.9m dwt during the period, accounting for 37.8% of global market share.
Completion value for China"s shipyards increased 20.3% to Yuan849m ($124.8m) while value of the shipyards" export raised 27.4% to Yuan39.5m compared with Yuan31m in the same period last year, the association said.
Cansi said the shipbuilding industry"s recovery lagged way behind the resurgence of the global economy. Risks of order cancellation and delivery delays for local shipyards remained high as vessel deliveries peak in 2010 and 2011.
In terms of pricing, Cansi said current shipbuilding prices had hit their lowest in 13 years. Existing orders at most of China"s shipyards would start to dry up in the first half of 2011, forcing many shipyards to undercut their prices in an effort to absorb more new orders, the association added.
However, Cansi pointed out the surging material cost and the appreciation of China"s currency could slow down price cutting.
The association expects more traditional shipping companies such as Japan"s NYK Lines and Mitsui OSK Lines to revive their fleet expansion plans as a result of the continued price decline.
In terms of ship types, bulk carriers remained the industry"s mainstay accounting for about 65% of total new orders in the country"s shipyards. Orders for containerships remain sluggish, but the association expects to see a marked improvement in orders in the second half of this year if the ship prices continued to decline, the Cansi said.