Asian shipbuilding sector poised for turnaround as order mom
Asian shipbuilding sector poised for turnaround as order mom Following the sharp decline in the demand for newly-built ships that started in 2008, there has been positive signs of recovery in the Asian shipbuilding sector amid increased optimism about the global economy and new orders coming in. The Asian shipbuilders, particularly the Chinese, have in recent years gone through a difficult period with continued delays in deliveries, order cancellations and prices of newly-built ships. However, the demand side has been showing early signs of recovery this year, with 72 million deadweight tonnages (dwt) of orders for new vessels year-to-date, exceeding the 54 million dwt of orders last year. The prices of new vessels have also improved by 2.4 percent year-to-date, according to Credit Suisse Research. Commercial shipbuilding market is likely to be at a cyclical trough as order momentum for commercial shipbuilders improves and inquiry levels at the yards are strong. With more financially sound shipping companies taking advantage of the low prices for new vessels, DBS Group Research expects more orders in the coming months. Likewise, Credit Suisse also forecasts new orders to exceed vessel deliveries in 2014, citing the order-book to fleet ratio of shipping sector down to 16 percent from a peak of 62 percent in August 2008, which is poised to create pent-up demand in the light of sustained recovery in the global economy and seaborne trade. The recovery in the shipbuilding sector is also bolstered by the on-going consolidation that caused close to 20 percent of total Chinese yard capacity to stop production since 2007. Credit Suisse said the consolidation should favor leading yards with strong financial position. Based on the estimates of the Swiss research house, the market share of top 30 yards has increased to 74 percent from 67 percent in 2011. Indeed, the recent policy initiatives in China could accelerate the on-going consolidation. The Shipbuilding Industry Accelerated Restructuring Plan issued by the State Council last month includes measures to halt approvals for shipbuilding projects and freeze credit support for expansion of facilities. But DBS Group cautioned against over-optimism on Asian shipbuilders. While the worst is probably over, the research house said the industry is still plagued with overcapacity issue, and any rebound may take some time. JP Morgan Research went further to say that despite a recovery in new building orders, historical trends will not be a reliable guide to drivers going forward. Longer-term changes in the industry will be driven by an eco-ship replacement and this new cycle is still in a very early stage. JP Morgan explained that the rising importance of fuel efficiency will change the Asian shipbuilding landscape in the medium to long term. It said there would be an unprecedented replacement cycle for ships over the next decade, driven by fuel efficiency. Most existing ships will become less useful and are likely to be scrapped much earlier than expected. In this new cycle, labor cost will become less important, whereas technology and quality will be increasingly important amid tightening environmental regulations. Based on such trend, JP Morgan expects South Korean yards to strengthen their first position thanks to newly designed eco-ships, and Japan will emerge as the second shipbuilding country, ahead of China, up to 2015 due to the diminishing productivity gaps and focus on fuel efficiency. Source: Xinhua
2023-06-14 | LION HARDWARE
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Hanjin's Subic yard nearly doubles annual order target
Hanjin's Subic yard nearly doubles annual order targetA research note out from Korea's Kiwoom Securities shows what a hugely successful year Hanjin Heavy Industries & Construction's Philippine subsidiary has had."Hanjin's Subic Shipyard is expected to accomplish over 180% of its annual order aim with a possibility of winning $2.2bn contracts by the end of this year," the report noted.The giant Subic yard has inked 37 orders this year, a mix of larger bulkers and mid- to large-sized containerships, ensuring it is busy for at least the next three years. Source: Sea Ship News
2023-06-14 | LION HARDWARE
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