China’s Jan-Oct shipbuilding orders up, yard costs too
The country’s major shipbuilders enjoyed a sparkling 41.4%
on-year surge in new vessel orders during the January-October period to 28.46
million deadweight tons (DWT), according to the latest statistics released by
China Association of the National Shipbuilding Industry (CANSI) on November 16.
By the end of October, China’s shipyards were still holding a backlog of new orders totalling 85.46 million DWT, up 5.2% year on year, while their new vessel deliveries dropped by 14% on year over January-October to 30.23 million DWT, the data showed.
“To keep activity in their yards stable, the shipbuilders are trying to maintain their order backlogs (in tonnage terms) at two to three times the weight of new vessel deliveries, considering that they need two or three years to construct large vessels,” an official from CANSI explained.
Still, with the deliveries of new vessels showing negative growth during January-October, the shipbuilders may face difficulties including a liquidity squeeze and risks from climbing costs, he noted.
In fact, the total margins earned by the country’s 80 key domestic shipbuilders over this year’s first ten months monitored by CANSI sank by 22% on year to Yuan 1.48 billion ($213 million), according to CANSI’s data.
CANSI blamed rising costs of raw materials and labour for the plunge in the shipbuilders’ fortunes over January-October. For ship plate for example, Mysteel notes that as of November 16, the national benchmark for 20mm shipbuilding plate had increased by 3% or by Yuan 126/tonne on year to Yuan 4,660/t including the 16% VAT, though the price was 4% lower than one month earlier.
“We received few (ship plate) orders for last month even though the price has been dropping since end-September, in line with those of other flat steel items due to the softer market demand,” an official from Hunan Valin Xiangtan Iron and Steel Co (XISC) in Central China’s Hunan province said. Hunan Valin hosts 2 million tonnes/year of shipbuilding plate capacity and enjoys a leading share in the domestic market.
Written by Thea Feng, fengyx@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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