European Banks’ recent statement to temporarily close ship financing business and the U.S. Senate’s decision to push the appreciation of yuan are just like the overnight rain for the already leaking house of Chinese shipbuilding industry. Those state-owned shipyards and shipowners are able to manage to survive in the predicament by sufficient capital, strong technology and special supports while some small private shipbuilders are left to face the bleak prospects of being merged.
However, there is still a ray of hope in the darkness for those market players. First, the government's intervention is gradually showing its effects. The said large orders for VLCC in China are expected to play a key supporting role in future domestic shipbuilding market. Second, the price of containerships has finally stabilized, which means the outlook for manufacturers capable of building large boxships is pretty good. Canadian SEASPAN’s big order for large boxships could provide few-year workload for a shipyard. Meanwhile the rumored French CMA CGM's 20-mega –containership order will also bring the market further support if finalized,
The Chinese Newbuidling Price Index for the period has slight declined mainly driven by the fall of bulker price. Tanker index underwent slight decrease while containership prices remain stable.
The prices for handymax, Panamax and Kamsarmax bulk carriers have all seen great decline in the period. Because almost any medium and large size shipyards are capable of building these ship types, the competition becomes very intense once any inquiry and thus draws the prices down. Handysize bulker is till hot in the current market and it is reported that a domestic shipyard is in negotiation with few shipowners for orders for Handysize bulkers. Besides, a shipbuilding group has signed a contract for 4 +2 CROWN63 (63500DWT) handymax bulkers with foreign shipowners, and a Greek shipowner has put an order for 2+4 Kamsarmax in Shanghai with delivery in 2013.
As for other ship types, Jiangsu Shipyard has sign a construction contract for 1+1 75K DWT tanker with a Shanghai owner. Another Jiangsu shipyard successfully secured 2+2 LNG-fueled MPVs from a Nordic shipowner.
Domestic shipyards and design institutions are encouraged to develop energy-efficient vessels to attract shipowners. It would be great advantage for shipbuilders for those new vessels save 10-20% energy.
However, the current situations are not so optimistic with few orders for even the best design. It is still unclear how the market goes in the forth quarter of the year.