NEWS ANALYSIS
Figures show deliveries defying global crisis
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f the size of the shipping orderbook has been continuing to cause concern, this has not stopped yards continuing to expand their output, writes Sandra Speares.
According to Martin Stopford, managing director
of Clarkson Research Services, yards have still been expanding output in the last two years, with each year expected to be the peak. Last year deliveries went up to 162 million dwt,
compared to 151 million dwt the year before. “Tat is pretty well double what it was seven years before that. We assumed that was definitely going to be the peak but at the moment we have so many deliveries coming through this year, we are now projecting 163 million dwt in 2012.” Te Chinese are now the biggest builders and in terms
of compensated gross tonnage did 19.4 million cgt, compared to 16.1 million for South Korea, and 9 million cgt for Japan last year. While China is the biggest, there are very big differences from the product perspective, Dr Stopford explains. China is very heavily focused on bulk carriers, which accounted for 60% of production last year and this year. China does not build a lot of container or gas ships at the moment. Te Koreans have a more even product range spread across bulkers, tankers and container ships. Te Koreans are the world leaders in tanker and container
ship production by a very big margin, Dr Stopford says and they are also the world leaders in gas production and offshore production. “Te way the cookie has crumbled is that the Chinese and Japanese are very heavily focused on bulk carriers, which are the lion’s share of deliveries this year, and the Koreans are much more diversified.” While China remains the biggest producer it will have
to get over the hurdle of changing product range as orders for bulk carriers and tankers have fallen off dramatically so far this year, Dr Stopford says. In the first half of 2012, there were 6 million dwt of orders for tankers, 9 million dwt of orders for bulkers and in value terms in the first half of 2012 there was US$3 billion worth of tankers, US$3.9 billion worth of bulk carriers, US$15.7 billion worth of offshore and US$4.5 billion of gas, with less than US$1 billion of container ships. “Te traditional markets have completely fizzled out,”
Dr Stopford says. “ We are getting right to the point where shipyards are getting ready to fall off a cliff and they are continuing to deliver to the last minute, probably because the contracts say so and if you miss your penalty date, the owner will walk”. Te Koreans are looking well placed because of their
diversified product range, including offshore, while the Japanese and Chinese have to do a certain amount of
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adaptation. Dr Stopford says it will be very difficult for some yards to change. Te problem they have is that gas and containers – which are big potential growth markets – are both quite specialised, and it is tougher for a newcomer to enter the market. Dr Stopford assumes that China will turn to the
domestic market for orders. State yards are well established and can expect government support, but private yards are very varied with varying sizes and levels of capital expenditure. Dr Stopford expects deliveries will fall away sharply from the peak. Once the existing ships have been delivered – the current order book is at 20% of the fleet – orders will fall off. Mark Williams, head of the research department at
Braemar, says that a lot of the Chinese yards have been feeling the effects of the slowdown in buying activity and many have not placed an order for some time. Te president of the Chinese Shipbuilding Association is on record as saying that as many as one third of Chinese shipyards may go bust by the end of 2013. Having said that, he says that while a shipbuilding
company may go bust it doesn’t mean that the yard itself disappears and it can always be brought back into service. “I think the Chinese would like to diversify away from straight forward commodity ships, but it is about the technology. A number of them are doing their best” Some of the yards that have got overseas investments are developing technology to build more sophisticated vessels than bulk carriers and simple commodity ships, Williams says. “I think the Chinese will get there in time, they’ve
proved it in other industries. Whether they can do it quickly enough to turn a profit and retain employment and maintain market share, it is on a case by case basis”. He expects the two big shipbuilding groups CSSC and CSIC to remain stable. “Te shipyards that might struggle are the ones that have majority private ownership that are concentrating on smaller, simpler vessels”. While it doesn’t seem likely that Chinese yards can
build up a facility in a short space of time stranger things have happened, and the Chinese have a reputation for building experience faster than most. A good example is the deal between Nantong Mingde
Heavy Industry in July to build 21 LNG ships for Bermuda-based Cambridge Energy Group. The deal has been much discussed, not least because of China’s position as relative new kid on the block when it comes to building specialist LNG ships. As far as banking on LNG as the fuel of the future is concerned, is this where the ship yards are pinning
The Naval Architect September 2012
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