Chinese shipbuilding industry

Despite the global financial crisis, China's completed shipbuilding output in 2009 surged by more than 40 percent, with its share in the global market rising further. In 2009, China overtook South Korea as the country with the largest volume of newly-undertaken ship orders.

According to the latest statistics, in 2009 China's completed shipbuilding output totaled 42.43 million deadweight tons (dwt), up 47 percent year on year; meanwhile, newly-undertaken ship orders in China in the year in question amounted to 26 million deadweight tons, down 55 percent. By the end of December 2009, ship orders in hand came to 188.17 million deadweight tons, down eight percent compared with the end of 2008. Moreover, China's completed shipbuilding output, newly-undertaken ship orders and orders in hand accounted for respective shares of 34.8 percent, 61.6 percent and 38.5 percent of the world market, up 5.3 percentage points, 23.9 percentage points and three percentage points year on year.

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Wärtsilä axes 1,400 jobs and boosts China presence as orders collapse

Craig Eason - Wednesday 20 January 2010

FINNISH engine maker Wärtsilä is shifting parts of its marine production business to China in a move that will see up to 1,400 jobs lost in various divisions as it reacts to the decline in orders.

Propeller production will be shifted to China, particularly to the company’s joint-venture production facility with China State Shipbuilding Corp ...

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China surpasses Korea in orders for new ships
January 13, 2010
Korean shipbuilders were outpaced by their Chinese rivals in the number of new orders received last year as well as in order backlogs, a London-based market researcher said yesterday.

Korean shipbuilders such as Hyundai Heavy Industries Co. and Samsung Heavy Industries Co. won a combined 3.15 million compensated gross tons (CGTs) in new orders last year, accounting for 40.1 percent of all new global orders, said Clarkson Plc.

New orders at Chinese shipyards totaled 3.49 million CGTs during the cited period, accounting for 44.4 percent of the total, Clarkson said.

Market watchers said Chinese shipbuilders have gobbled up new orders at cheap prices, while Korean shipbuilders have continued to focus on high-priced vessels and offshore facilities. Korea, home to seven of the world’s top 10 shipyards, has clinched record-high orders in the past few years on strong demand for crude carriers and offshore exploration equipment amid lofty oil prices.

But orders for new vessels have sunk since the third quarter of 2008, as the credit crisis and the subsequent global recession prodded companies to postpone delivery dates or cancel orders. Korea also yielded the top position to China in the global shipbuilding industry in terms of order backlogs, according to the researcher.

Korean shipbuilders’ combined order backlogs totaled 52.83 million CGTs as of early January, compared with Chinese rivals’ 53.22 million CGTs, it said. Yonhap

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Clarkson, the British-based agency specializing in the dynamic analysis of the shipbuilding and marine market, has reported that the Chinese shipbuilding industry is now ranked first in the world as regards the main three indexes which are considered to be the most important parameters in the shipbuilding market, i.e., contracting, backlogged volume and deliveries.

As stated by Clarkson, during the first half of 2010 China's deliveries of new vessels reached 8.01 million compensated gross tons (cgt), more than South Korea's volume of 7.48 million cgt. Meanwhile, the contracting and backlogged volumes in the Chinese shipbuilding industry came to 5.02 million cgt and 53.31 million cgt respectively, both exceeding the corresponding figures for South Korea.

With support from the Chinese government, China's domestic shipbuilding industry has recovered after the economic crisis and achieved rapid development in the past year. The agency expects that the Chinese shipbuilding industry will maintain its first place up to the end of the current year despite the revival of the South Korean shipbuilding market.

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New orders for China’s shipbuilders increased by 420% year-on-year in the first seven months of 2010 according to a report issued by the China Association of National Shipbuilding Industry.

New orders during the period amounted to 33.3 million DWT, including orders for 9.54 million tonnes in the month of July alone. Total shipbuilding output for the first half was up 87.4% year-on-year to 35.2 million tonnes and the value rose by 22.7% to $54.8 billion.
However, some analysts fear that this massive growth is fueling overcapacity in the container and oil carrier business, especially as lacklustre recoveries in Europe and the US continue to depress demand.

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China leads the world in shipbuilding, according to the latest statistics released on the official Web site of the China Association of the National Shipbuilding Industry.

In the first half of 2010, China's shipbuilding capacity, the number of new orders and the volume of backlog orders accounted for about 41 percent, 46 percent and 38 percent of the world market, respectively.

The accomplishments of China's shipbuilding industry has drawn worldwide attention

In the first half of 2010, China's shipbuilding enterprises completed and exported 24.3 million deadweight tons, accounting for 82 percent of the total shipbuilding capacity, and the volume of new overseas orders reached about 16.4 million deadweight tons, accounting for 69 percent of the total volume of new orders.

By the end of June, the volume of holding ships for export had reached 160.3 million deadweight tons, accounting for 87 percent of the total volume of holding ships. The shipbuilding enterprises above designated size have accomplished a total export delivery value of 139.6 billion yuan, up by nearly 18 percent compared to the same period last year.

"China has witnessed remarkable achievements in the shipbuilding industry in recent years. The shipbuilding industry has become one of the industries with world-class competitiveness in China and an important window for countries worldwide to understand the level of China's industrial development," said Zhang Changtao, chief researcher of the Economic Research Center of China Shipbuilding.

The analysis report of the China Association of the National Shipbuilding Industry reveals that in the first half of 2010, China's shipbuilding industry has maintained rapid development by overcoming difficulties resulting from the global financial crisis, such as obtaining orders and delivering ships.

Shipbuilding capacity and the volume of new orders have risen remarkably, the major economic indicators have maintained double-digit growth and the overall economy has performed well.

China's shipbuilding industrial output value, ship exports and enterprise profits kept rising in the first half of 2010. According to the statistics from the Economic Operation Department of the China State Shipbuilding Corporation, in the first half of 2010, among the shipbuilding, facilities, ship repair and non-vessel business segments of China State Shipbuilding Corporation, the share of shipbuilding and facilities have both risen, and the shipbuilding output value accounts for nearly 82 percent of the industrial output value, up by nearly 4 percent compared to the same period of last year.

China's shipbuilding industry enjoys distinctly favorable conditions

The effective market demand is of critical importance to the development of the shipbuilding industry. Zhang Xiangmu, director of the Equipment Industry Division of the Ministry of Industry and Information Technology, said that as China's imports and exports both grow continually, domestic ship owners are in urgent need to increase transportation capacity and optimize fleet structure, which has thus provided the domestic shipbuilding industry with enormous room for growth.

Another important reason for the rapid progress and great achievements of the domestic shipbuilding industry is that the central government has introduced many effective policies aimed at guiding the industry's development. China has fully mastered the technologies required for constructing oil tankers, bulk carriers and container ships, and now owns a series of standardized ship brands.

China has independently developed a series of ships such as the eco-friendly bulk carrier with a displacement of 175,000 tons and new-generation ships that meet international standards. In addition, the country, which is now capable of independently designing and building large container ships, has started the mass production of these ships and has put them on the market.

Trying to shift from "big" to "strong"

Zhang Changtao said that although China's shipbuilding industry has achieved remarkable success in the past two years, it is still faced with many limiting factors such as weak independent research and development capacity, high dependency on imports of shipboard equipment, low production efficiency and defective industrial structure.

China's shipbuilding industry is in a crucial period of transition from a "big" industry to a "strong" industry. Zhang Xiangmu believes that due to the changes in the international ship market, China's shipbuilding industry, which will be at the key stage of structural adjustments in the next few years, should give top priority to the improvement of product quality to achieve the strategic goal of becoming bigger and stronger.

Zhang Guangqin, director of the China National Shipbuilding Industry Association, said that the top priority in fostering the development of China's shipbuilding industry and enhancing its international competitiveness is to promote industrial restructuring. Facing fierce competition, the industry must optimize the allocation of resources and keep innovating in order to achieve better development.

In addition, competitive shipbuilders that are mutually complementary should be encouraged to merge with each other, so they can make better use of the economy of scale in many aspects such as research and development as well as marketing. Meanwhile, medium-sized shipbuilders should be encouraged to pay special attention to their specialties and perfect the quality of their products.

China should attach great importance to the new international maritime rules and try to develop low-carbon ships in order to increase its global influence.

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tphuang said:

now, it's important for China to move up the value chain in shipbuilding.

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asif iqbal said:

I think China needs to make more progress in engines for its destroyers and frigates, can China make engines for them yet? last i heard they bought from france

also nuclear power for navy is important for when china deploys a supercarrier

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now, it's important for China to move up the value chain in shipbuilding.tphuang

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A large China-made vessel, which is capable of defending against pirates and has a tonnage of 50,000, was handed over in southern China's Guangzhou on Jan. 20.

The vessel, named Xiang Yun Kou, has special defenses against pirates, including bullet-proof shields and 5,500 automatic alarm points on board.

The vessel is the largest professional carrier for marine engineering equipment in Asia at present and one of the few ocean-going special ships that have anti-pirate functions in the world.

According to the buyer, the vessel was highly sought after on the international market at the time of construction.

By Li Mu, People's Daily Online

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