|
|
|
|
|
|
|
International Cooperation Department
Tel.: (+86-21) 65853850-8034
Fax: (+86-21) 65373125
E-mail: ICDept@sisi-smu.org
|
|
|
|
|
International Shipping |
|
| China, the return of the king! Sweeping 90 per cent of global orders! Korea has only 2 per cent. |
|
Date:2024-09-10 Readers:
|
Chinese shipbuilders regained the top spot in the global newbuilding market in terms of new ship orders for a single month in August 2024 by a significant margin, according to newly released data from Clarkson.
Data released by Clarkson on 5 September showed that in August this year, the global new ship order book stood at 3.87 million CGT (106 ships), up 63% from a year earlier. Among them, the order quantity of Chinese ship enterprises was 3.47 million CGT (95 ships), occupying 90% of the market share, ranking first in the world. South Korea's order book was 80,000 CGT (4 ships), occupying only 2% of the market share.
From January to August this year, the global cumulative new ship orders reached 42.07 million CGT (1,454 ships), up 30% from 32.31 million CGT (1,436 ships) in the same period last year. Among them, the order book of Chinese shipbuilders was 28.22 million CGT (1,015 vessels, accounting for 67%), an increase of 53% year-on-year, and the market share ranked first. The order book of South Korean shipbuilders was 8.22 million CGT (181 ships, accounting for 20%), up 14% year-on-year, with the second largest market share.
As of the end of August this year, the global hand-held new ship orders amounted to 143.78 million CGT, and the hand-held orders of Chinese shipbuilding enterprises amounted to 77.15 million CGT, accounting for 54% of the market share, ranking first. South Korean shipbuilders held orders of 39.02 million CGT, occupying 27% of the market share, ranking second.
Newbuilding orders from South Korean shipbuilders, which had topped the list in July with a 40 per cent market share, lost the lead just a month later, falling to 2 per cent, while Chinese shipbuilders' market share soared to 90 per cent.
By the end of July, the Clarkson New Ship Price Index recorded 189.2 points, up 9 per cent year-on-year, and has risen for 45 consecutive months since November 2020, and is 55 per cent higher than the 121 points recorded at the start of the market in 2020, and just one step away from the all-time high of 191.6 points.
With the merger of China State Shipbuilding Corporation (CSIC) and China Shipbuilding Heavy Industry Corporation (CSIC), it is expected that South Korea's small and medium-sized shipbuilders will be hit hard.
In the first half of this year, China Shipbuilding achieved operating income of 36.017 billion yuan, an increase of 17.99% year-on-year, of which 34.446 billion yuan of shipbuilding, repair and offshore engineering business, an increase of 22.39% year-on-year; 1.412 billion yuan of net profit of the mother of the net profit, an increase of 155.31% year-on-year. China's heavy industry to achieve operating income of 22.102 billion yuan, an increase of 31.05%; achieve net profit of 532 million yuan, an increase of 177.13%.
Both listed shipbuilding companies are subsidiaries of China State Shipbuilding Corporation. Ltd. is the world's largest shipbuilding group, with about one-third of the world's market share in terms of shipbuilding orders, and the combined total assets will be 376.2 billion yuan (listed assets) in one go.
South Korea's shipbuilding industry believes that China and South Korea's small and medium-sized shipbuilders build similar types of ships. The merger of China Shipbuilding and China Heavy Industry will further enhance price competitiveness through economies of scale. Currently, some South Korean small and medium-sized shipbuilders are already in trouble due to China's low price offensive. Chinese shipbuilding prices are about 10 to 15 per cent cheaper than South Korean shipbuilding prices.
In addition to price, repayment guarantee is also a stumbling block on the way of Korean small and medium-sized shipbuilders. Shipowners require financial institutions to provide guarantees when placing orders, and a repayment bond is a guarantee system whereby banks are responsible for refunding advance payments if ship construction does not proceed as planned, and is a necessary condition for signing an order contract. Korean medium-sized shipbuilders mainly rely on Korean state-owned banks to obtain repayment guarantees. However, the amount of issuance is restricted due to limited credit lines. If financial institutions do not issue repayment guarantees, Korean shipbuilders will not be able to take on new orders.
Labour shortage is also a serious problem for Korean shipbuilders. One of the reasons Daehwang Shipbuilding entered the restructuring process was because of wage increases due to labour shortages and delayed compensation payments due to delivery delays.In 2008, South Korea used to have as many as 27 medium-sized shipbuilders. However, most of these companies were forced out of the market during the extensive restructuring process following the global financial crisis. Today, the only mid-sized shipbuilders left capable of taking ship orders are Korea Shipbuilding, K Shipbuilding and HJ Heavy Industries.
With regard to the shortage of shipyard labour, participants at the recent Trade Winds conference in Hamburg were told that the number of shipyard workers has not increased despite the increasing number of orders for newbuildings and conversions. As a result of the labour shortage, shipowners and operators are concerned about the quality of new and second-hand repair and maintenance parts, and whether new ships are adequately supervised to meet construction standards. The shipbuilding industry needs to bring in more talent and needs to subsidise engineers' qualifications, said Alex Green, vice president of the corporate venture capital division of Merrill Mitsui.
In May, the Korea Industrial Research Institute released a report saying that China's shipbuilding industry ranks first in the world in 2023 in terms of the overall competitiveness of the shipbuilding industry's value chain. From the viewpoint of various fields, South Korea has a competitive advantage only in R&D and design and procurement, while China's competitiveness is very high in terms of production, maintenance and service, as well as demand. In addition, in terms of ship types, South Korea has a significant lead over China in natural gas carriers; in containers, China and South Korea are neck and neck; and in tankers, China's competitiveness has surpassed South Korea's since 2022.
The Korea Export-Import Bank's Overseas Economic Research Institute pointed out that if South Korea wants to continue to maintain the production capacity, competitiveness, and ability to create added value of the shipbuilding industry as a pillar of the national economy, and to consolidate its position as the world's shipbuilding powerhouse, the country has to cope with the problem of orders being too concentrated on a small number of ship types and has to solve the challenges such as the shortage of labour in order to achieve the sustainable and stable development of South Korea's shipbuilding industry.
In response to the enhancement of South Korea's shipbuilding capacity, Yonhap News Agency reported that the South Korean government will invest 2 trillion won (about 10.5 billion yuan) with the private sector by 2040 to become a global first-class shipbuilding technology powerhouse, launch 10 core projects and develop into a powerhouse in the field of shipbuilding, offshore engineering technology and ship equipment, and focus on building an automation-based shipbuilding system.
https://www.cnss.com.cn/html/hygc/20240909/354531.html
|
|
Back:
The predicament of European shipowners: having to cope with low carbon fleet renewal when the price of ships is getting higher and higher | Shipping
Next:
Delivery of 24,000 TEU class container! Hudong-Zhonghua Offshore Giant is born!
|
|
|
|
|
|
|
