Shiptec China – 2014:Recovery of ship market is still a long-term undertaking


In just under seven months’ time marine professionals from China and around the world will be gathering for the opening of Shiptec China 2014 at the Dalian World Expo Center. Taking place between the 21st and 24th October, it is the 11th holding of this increasingly important event and the organisers have now confirmed many aspects of the forthcoming event.

In this exhibition, we focus more on whether we can find a way out for the development of ship market by analyzing the conditions of shipping market and data.

Recently, the overcapacity in shipping market and overproduction in ship market have not been turnaround in a fundamental way. The whole industry cannot wait for a recovery. In short, although the orders blowout in 1H 2014, most domestic ship enterprises still gained no profit.

Between January and August, the gross industrial output value of the 87 major shipbuilding enterprises in China saw growth of 9.8% year-on-year (y-o-y) to RMB 263.7bn. The gross output of ship manufacturing increased by 4.1% to RMB 129.5bn, according to data from the China Association of the National Shipbuilding Industry (CANSI).This was in spite of an 18.1% y-o-y decrease in aggregate shipbuilding in China, which fell to 22.08m DWT in total. Shipbuilding output for export accounted for just over 86% of China’s total output. New vessels for export totaled 19.07m DWT between January and August, down 7.3% y-o-y. The value of these exports was 4.5% more than during the corresponding period of 2013, with a value of RMB 111.6bn this year. New vessel orders placed during the eight-month period totaled 47.4m DWT, up 35.8% y-o-y. Export orders for new vessels increased by 50% y-o-y, totaling 44.65m DWT, and constituted 94.2% of total new ship orders at Chinese yards. At the end of August, there was a total of 153.7m DWT on order at Chinese shipbuilding enterprises, the CANSI data says, an y-o-y increase of just over one-third, and up 17.3% on the tonnage on order at the end of 2013.Of these orders, vessels for export accounted for 146.16m DWT – equal to 95.1% of China’s shipbuilding orderbook at the end of August. There was a 57.2% increase in tonnage on order compared to the same period last year.

However, the limited recovery of shipping market bring the order climbing up cannot driver the increase of the enterprises’ earnings. According to semiannual report, except China State Shipbuilding, the performance of other shipbuilding enterprises sharply declined and even some reported an operating loss. The orderings are active with lower price. The ship yards even sacrificed own profit to improve the orders.

It cannot be denied that the overcapacity in ship market still disturbed the whole industry. The global shipping market is in depression and shipowners negatively took over ships.

In addition, the prices for iron ore and steel are at lower level, which can release the pressure for shipbuilding enterprises and reduce the cost of ship enterprises. However, the iron ore import may be decreased influencing shipping demand and shipbuilding market in a certain extend. The overcapacity, the supply-demand contradiction and the hanging down BDI will affect the recovery of ship market.

The shipbuilding enterprises shall enhance management to improve efficient; reduce cost and strengthen risk control to welcome the genuine recovery of ship market.

Source from : CNSS