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Conquest in five provinces and cities; China’s shipbuilding industry ranks the first in the world.

Date:2011年1月21日 14:46

Statistics released recently by the Ministry of Industry and Information Technology showed that the quantity of ships completed, new orders and the orders at hand in China in 2010, all three indicators exceeded South Korea. China became the largest shipbuilding country in the world.

However, the analysts point out shipbuilding big country is not equal to shipbuilding powerful country. Shipbuilding market is full of changes and the shipbuilding industry in China will turn gradually from fast growth to normal growth in future.

Trans normal growth

Statistics issued recently by the Ministry  Industry and Information Technology showed that, during January to December 2010, the quantity of ships completed in China was 65 million dead weight tons, increased by 54.6% compared to the same period of last year, in which: the seagoing vessels were 20.78 million compensated gross tonnage. New orders of ships were 75.23 million dead weight ton, were 2.9 times higher than the new orders over the same period last year, in which: the seagoing vessels were 22.9 million compensated gross tonnage. Up to the end of December last year, the orders at hand were 195.9 million dead weight ton, 4.1% more than the orders at hand at the end of 2009, in which: the seagoing vessels were 56.95 million compensated gross tonnages. The ships for export accounted for 84.6% of total ships ordered.

“Shipbuilding output, revenue and profits increased greatly in recent years and attracted a large quantity of capital flow from other industries” said Mr. Bao Zhangjing, the chief researcher of China Shipbuilding [69.84 -1.48%] Industrial Economy Research Center.

The shipbuilding enterprises are mainly distributed in Jiangsu, Shanghai, Zhejiang, Shandong, Guangdong and other coastal provinces, in which, Jiangsu Province is far ahead and ranks first.

The data published recently by Jiangsu Economic and Information Commission showed that, 9 of 11 enterprises with the ships completed over million dead weight ton in China were located in Jiangsu Province in 2010. The new orders took 21.6% of total world share. The orders at hand were stably more than 70 million dead weight ton. At present, the production tasks of main ship enterprises in Jiangsu Province have been arranged after 2012. The orders in Jiangsu Rongsheng have been arranged to 2015.

The statistical data of Shanghai and Zhejiang had not yet been released, but some analysts believed that the completion quantity in 2010 were likely to be about 10 million dead weight ton, and was about 5 million dead weight ton in Shandong Province.

Return to normal

Mr. Bao Zhangjing believed that the big development of shipbuilding industry in recent years, in general, could be attributed to the growth of transport demand due to the economic growth. China has the obvious advantage in labor force. The domestic market is very big. The technology gap with foreign countries is shrinking increasingly. These factors are integrated and create "bull market" in several years.

In the factors that affect the future of shipbuilding industry, the first one is whether the demand grows. At present, the external environment and macro environment are uncertain. The demand in future may be insufficient; the production capacity may be over; the competition may be more severe, and then the prices are lower. The overall industry profit is lower.

“In general, both international environment and domestic environment are more difficult in future.” said Mr. Bao Zhangjing.

“Foreign currency exchange rate rise and higher cost cut seriously our profit this year”, an employee from a large-scale shipyard in Jiangsu told the reporter of "China Business News".

Foreign currency exchange rate rise, higher cost and over production capacity are the un-avoided secret worries of ship-building industry.

Mr. Li Yanqing, Deputy Director of China Ship Information Center told the media that the shipbuilding enterprises in China suffered the loss of ¥8000 million due to RMB appreciation, in which: the invisible loss on the orders at hand was ¥7000 million, and the loss of the ships handed over was ¥1000 million in 2010, if the statistical data from Clarkson Research Services Ltd as a reference, and assuming that the first payment ratio reached 70% on the contracts signed before the international financial crisis; the first payment ratio was 20% after the crisis; the shipbuilders suffered 3% loss on the orders signed due to RMB appreciation before the reform of exchange rate formation mechanism; the shipbuilders suffered 1.5% loss on the orders signed after the exchange rate reform due to RMB appreciation and other factors calculated.

An analysis report of China Association of National Shipbuilding Industry mentioned, in addition to exchange rate factor, cost rising on interest rate, labor, steel, coke and other raw material becomes the major problems in shipbuilding industry.

                                                                          --- taken from China Ship News Network

TypeInfo: Industry news

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