According to the statistics of China Association of National Shipbuilding Industry (CANSI), many bulk carrier orders were cancelled in the first quarter. Big shipyards are showing great interests in LNG carriers.
In the first quarter of 2011, China’s combined newbuiding output hit 14.46m dwt, basically the same with last year, while new orders and orderbook came up to 10.91m dwt and 190.04m dwt respectively. Shenyin & Wanguo Securities pointed out current Chinese new orders were continuing the restorative rise which has began since 2010. However, it is difficult to keep this increasing tendency.
The traditional products structure of domestic shipyards, which focuses on bulker carriers and tankers, is facing severe challenges under the double blow of bulker overcapacity and sluggish shipping market. In the first quarter, the cancelled orders came up to 21 vessels of 1.075m dwt nationally, which accounts for 0.57 of the total orderbook and mostly are bulker carriers.
In addition, shipyards are getting more tough financial problems. As some shipbrokers said that newbuilding bulker price has dropped by about 30% and the shipyowners’ payment ratio has gone down to 40% or even 20% from the original 70%-80% after the financial crisis. Many bulkers built in 2011 have entered secondhand market with parity or even lower prices.
LNG carrier orders has boomed recently in international market with Golar LNG ordering four 160,000 LNG carriers from Samsung and its compatriot Hyundai getting a big order of 6 LNG carriers. Besides, many big shipyards are considering or in negotiation for LNG newbuildings.
Domestically, CSIC has successfully carried out R&D on LNG carriers and is trying to market its independently designed LNG ship type internationally. The group has kept its leading position in LNG carrier sector in China. Rongsheng also has planned to enhance its research and development on drilling vessels and LNG carriers.