Japan believes newbuilding price to be further increased

Mr. Mototsugu Ito, chairman of the Shipbuilder’s Association of Japan (SAJ), held his regular press conference and said that newbuilding price will be further increased.

After reaching their lowest point, newbuilding prices have started to recover this year and the SAJ hopes that this trend will continue and that price levels will soon be restored to profitable levels next year. However, Japanese shipbuilders remain concerned about the continued strengthening of the Yen which, if continued, will deal a huge blow to all Japanese export industries and not just shipbuilding.

Regarding newbuilding order of Japanese shipbuilder, Mr. Ito said that newbuilding contracts placed with Japanese yards in November 2003 were 1.44 million CGT, bringing the total for January through to November 2003 to 8.06 million CGT (14.50 million GT), which was 45% higher than for the same period in 2002.

Broken down by ship category, bulk carriers accounted for 39% of new orders which was not only a result of strong demand of iron and coal imported to China but also by a spate of last-minute orders for bulk carriers made to beat the entry-into-force date of the revised IACS requirements affecting vessels contracted after July 2003.

Tankers accounted for a 25% share which would reflect the IMO’s decision to put into place regulations for the phasing-out of single hull tankers. As a result of these factors, just under two thirds of all new orders were for these two ship types, whilst container ships accounted for only 15%, and all other vessels for 21%.