China’s ship­yards re­cover a bit in Jan-June

China Daily (Hong Kong) - - BUSINESS -

The new course adopted by ship­yards in Jiangsu, Zhe­jiang, and Shang­hai is largely the re­sult of many global ship­ping com­pa­nies re­port­ing losses since 2008 be­cause of over­ca­pac­ity, de­clin­ing global trad­ing vol­ume, fall­ing ship prices, surg­ing costs in la­bor, en­ergy, steel, ship parts and main­te­nance.

Ea­ger to en­hance its earn­ing abil­ity, Nan­tong COSCO KHI Ship En­gi­neer­ing Co, a 50:50 ship­build­ing joint ven­ture between China COSCO Ship­ping Corp Ltd and Ja­pan’s Kawasaki Heavy In­dus­tries Ltd, also aims to have an an­nual pro­duc­tion ca­pac­ity of two LNG car­ri­ers by 2018.

In ad­di­tion to LNG car­ri­ers, an­other Chi­nese ship­yard, Shang­hai Waigao­qiao Ship­build­ing Co Ltd, is build­ing a cruise liner, the first such ves­sel to be built on the Chi­nese main­land. It is ex­pected to be de­liv­ered to a Hong Kong-based buyer in 2023, mark­ing a mile­stone in the evo­lu­tion of the coun­try’s ship­build­ing in­dus­try.

The as-yet-un­named ship will be built at Shang­hai Waigao­qiao Ship­build­ing Co, a joint ven­ture between CSSC and Italy-based Fin­cantieri SpA, the world’s largest builder of cruise ships.

Waigao­qiao Ship­build­ing, an­other CSSC sub­sidiary, an­nounced ear­lier this month it will in­ject an­other 720 mil­lion yuan into its cruise liner build­ing tech­nol­ogy com­pany to im­prove its re­search and devel­op­ment strength.

The Hong Kong client will or­der two new lin­ers from the CSSC-Fin­cantieri joint ven­ture. It has an op­tion to or­der four more home-built ships.

“The con­struc­tion of China’s first cruise ship will help im­prove var­i­ous sec- tors of the do­mes­tic ship­build­ing ecosys­tem, which will be­come part of the global sup­ply chain,” said Dong Li­wan, a ship­build­ing pro­fes­sor at Shang­hai Mar­itime Univer­sity.

Even though Chi­nese ship­yards have re­cov­ered a bit in the first half of this year, Dong said com­pe­ti­tion with South Korean com­peti­tors will be fierce in the long term, es­pe­cially at a time when the whole in­dus­try is wit­ness­ing price wars and de­mand­ing ad­vanced ships with more func­tions.

South Korean ship­yards re­ceived 34 per­cent of global or­ders in the first half of this year, to top the world’s coun­try-wise list for the in­dus­try’s gi­ants, ac­cord­ing to Bri­tish ship­ping and off­shore mar­ket .in­tel­li­gence provider Clark­son Re­search Ser­vices Ltd.

Three South Korean com­pa­nies in­clud­ing Hyundai Heavy In­dus­tries Co and Hyundai Samho Heavy In­dus­tries Co, re­ceived 72 ship or­ders, in­clud­ing 60 for oil tankers and very large crude car­ri­ers or VLCCs, with a to­tal value of $4.2 bil­lion.

Mean­time, Sam­sung Heavy In­dus­tries Co re­ceived or­ders worth $4.8 bil­lion to build LNG car­ri­ers, mega-con­tainer ships and VLCCs from shipown­ers in South­east Asia and Europe.

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