In-depth analysis of Chinas shipbuilding industry

The Dublin-based research company Research and Markets has recently produced a report on the Chinese shipbuilding industry entitled “In-depth Analysis of China’s Shipbuilding Industry 2008”.

In this report Research and Markets states that in the first half of 2008 China contracted 455 new ships, down 48.30% year-on-year; carrying capacity 29,004,700 DWT, down 44.97% year-on-year. The new ship orders fell faster than the overall level, therefore the total market share of China’s shipbuilding industry in the global shipbuilding market has dropped from 42.96% in the last year same period to 33.71% in the first half of 2008, a decrease of 9.26 percentage points.

The reason of decreasing market share of China’s shipbuilding industry is structural changes of new ship types. For instance, last year, bulk carrier dominated the market, but, in the first half of 2008 oil tanker, particular VLCC has rebounded quickly, but, China does not have advantages on the building up of VLCC and other high-tech ships.

In the first half of 2008, the total output of China’s civil steel ship was 10,145,100 tonnes, up 42.53% year-on-year; the growth rate is faster than 2007, which was 29.35%. In the past five years, the average annual compound growth of China’s civil ship output was 24%.

In the first five months of 2008, China’s ship repair and ship-breaking industry achieved 24.237 billion yuan sales income, an increase of 76.19% year-on-year, 24 percentage points faster than the same period last year and 4.9 24 percentage points higher than 2007. Ship’s fitting achieved 12.348 billion yuan revenue, an increase of 76.65% year-on-year, 31.6 percentage points faster than the same period last year and 27.8 percentage points higher than 2007.

China’s strong economic growth has promoted the demand of sea and river transportation from iron ore, coal, grain, construction materials and other bulk. In 2006 and 2007, the total increment of China imported iron ore exceeded the total increment of global sea transportation. The total sea transportation volume of coal, iron ore, grain and construction materials reached 576 million tonnes and, according to forecasts, by 2011 these types of dry bulk cargo transport volume will reach 850 million tons in China, accounting for one quarter of the global sea transport volume of dry bulk.