China’s Jan-Apr new ship orders plunge 47% on year
Source: Mysteel
May 17, 2019 15:00
Among all the new ship orders China received in the first four months, some 8.74 million dwt or 92.1% were for export, down 47.7% on year, CANSI’s statistics showed. But the pace of the negative growth was also some 23.6% lower than that seen during January-March.
Also during January-April, China completed 13.25 million dwt of new vessels – higher by 13.3% on year – among which, 12.39 million dwt was for export, up 13.7% on year.
By the end of April, the backlog of orders still held by the Chinese yards amounted to 85.55 million dwt, down 8% on year or 2% less than the end of March. Of the total, nearly 77.17 million dwt are vessels for foreign buyers, down by 8.2% on year.
CANSI said that the continuing rise in the completion of new vessels and the slowing declines in new shipbuilding orders are mainly due to the fact that the Baltic Dry Index (BDI) witnessed significantly rises in April.
BDI, the world’s bellwether of the dry bulk freight market, increased 224 or 32.5% on month to 913 as of April 29 before continuing to rise to 1,032 on May 15, Mysteel Global notes.
The recovering BDI has shored up market sentiment in China’s shipbuilding industry and stimulated the major economic index of Chinese shipbuilders to rise, with the 80 key shipyards posting their total industry output value higher by 6.7% on year at Yuan 112 billion over January-April, according to CANSI.
Moreover, a Shanghai-based market source stressed that changes to regulations in areas such as fuel consumption mandated by the International Maritime Organization is forcing vessel owners to modernize their fleets – another factor that could help domestic builders conclude more orders.
“More attention is being paid to environmental requirements,” he explained. “Starting 2020, the sulfur content in fuel used in the global shipping market will be lowered from 3.5% to 0.5%, which could boost demand for desulfurization equipment, and domestic producers might see opportunities.”
Mysteel’s national 20mm shipbuilding plate price was assessed at Yuan 4,525/tonne ($657/t) including the 13% VAT as of April 29, higher by some Yuan 98/t or 2.2% on month, Mysteel’s database showed.
Written by Anna Wu, wub@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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