The depreciation of a 22,500 bulk carrier by about $2.0m in the past one year makes the shipyards in Zhejiang province feel the cold wind in shipbuilding market, especially the small and medium ones.
Due to the order draught and capital shortage, many small shipbuilders have gone bankrupt in the cold snap. However, some big shipyards in Zhoushan city see a bright future in offshore plant and special vessel sector.
According to Zhejiang Shipping Exchange Market, the indices for secondhand ships and newbuilding have both seen great decline in the past year. Take a newbuilt 22,500dwt bulker for example, the quotation for the ship in February 2011 was about $13.6m but has fallen to $11.8m by this February. The current assessment for a three-year 15,000dwt bulker and a seven-year 13,000dwt bulker are separately $4.76m and $3.17m, but the prices for the same type are over $7.93m in 2005.
Some insiders predict that the annual new orders will come up to 70m-80m dwt and newbuilding output totals 150m in 2012, which means the imbalance in shipping and shipbuilding is to worsen and newbuilding prices are likely to fall further
Zhoushan Hengyu shipbuilding’ bankruptcy has fully embodied the dilemma small shipyards face. Capital weakness, financing difficulty and depressed shipping market have pushed more and more shipbuilders into predicament. Many turned to ship repairing and scrapping for survival but the expected rebounding and prosperity has been too far.
Thanks to the orderbook accumulated after 2008, some shipyards still have outstanding performance in newbuilding output by now but the lasting flourish is still hard to reach.
In the cold and wintry days, some big players still feel the warm of spring based on their strength and innovation in technology. Jinhai Heavy Industry, Yangfan Group Zhoushan Shipyard, Zhejiang Peninsula Ship Industry and other big shipbuilders have successively won new orders for mega tankers, boxships, special ships, tanker conversion and so on. Many are trying to enter offshore plant and luxury cruiser sectors for better profits.
As Zhoushan government programs in the 12th five-year plan, the city’s ship industry output by 2015 is to be $19.0bn with an annual newbuilding output of 10.0m dwt and five shipyards listed in national top ten.
Overall, there is still a glimmer of hope looming in the gloomy market, Chinese shipyards are to make a way out by innovation and upgrade to embrace next spring of shipbuilding.