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Domestic Shipbuilding Booms Amid Robust Global Demand
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China's shipbuilding industry posted a 151 percent increase in its first-half profit, and the volumes of new and existing vessel orders in the period both exceeded those of Japan and South Korea for the first time.

 

The domestic shipbuilding industry realized a combined profit of 6.4 billion yuan (US$848 million) in the first half of this year, a 151 percent increase year-on-year. New ship orders hit a record of more than 42 million deadweight tons (DWT) during the period, and existing orders exceeded 100 million DWT for the first time, according to Nie Lijuan, vice secretary general of the China Association of National Shipbuilding Industry.

 

China has become the world's No. 3 shipbuilder after Japan and South Korea. According to the latest statistics, China's shipbuilding industry accounts for 20 percent of the global market. The shipbuilding boom is fueled primarily by soaring global demand, experts have noted.

 

Insufficient transport capacity has also boosted the shipbuilding market, said Yao Weifu, manager of the Shanghai Shipping Exchange's information division. Shipping demand in the international bulk dry-cargo market has risen by over five percent this year, while capacity has only grown three percent.

 

Poor capacity has resulted in a continuous rise in shipping charges, and shipping companies have earned a lot because of it, so shipbuilders seek to cash in on the demand for new ships by heavy investments.

 

China COSCO Shipping will build four 27,000-DWT multi-purpose ships worth US$126 million. China Shipping Development also plans to build four 308,000-DWT crude oil tankers worth US$460 million.

 

The shipbuilding wave will continue to rise in the next few years, experts predicted. The wave has also affected steel manufacturers, as the demand for steel plates keeps rising.

 

Jinan Iron and Steel Group, the nation's largest vessel steel plate maker, produced 850,000 tons of ship plates in the first eight months of the year, an increase of nearly 300,000 tons compared with the whole year 2006, according to the vice general manager Chen Qixiang.

 

Average prices of four main steel products, steel wire, reinforced steel bar, medium and thick plate, and cold-rolled steel sheet, all rose slightly in the fourth week of August compared with the previous week, according to a survey held by the National Development and Reform Commission at the steel trading markets in 22 key cities. Average price of medium and thick plate for vessel use was up 89 yuan from the third week of August to 4,507 yuan per ton, the biggest growth among the four.

 

(Chinadaily.com.cn September 5, 2007)

 

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