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China ShipbuildingSurvey of Shipping Industry Development 2008 Published：2009-05-25 Origin：China Industry News and chinagate.cn In 2008, confronting various severe challenges such as international and domestic macro-economic situation and complicated changes of shipping markets, rapid fluctuation of the prices of raw materials including steel and Renminbi appreciation, the shipping industry proactively coped with them, thus the overall economic operation performed quite smoothly and major economic indicators continuously maintained rapid growth. In 2008, the shipping industry accumulatively realized the total industrial production of RMB414.2b, up by 59.73% year-on-year; the nationwide accomplished shipbuilding amounted to 28.81 million deadweight tons, up by 52.2% year-on-year, with the global market shares rising from 22.9% in 2007 to 29.5%, and the newly accepted orders and the holding shipbuilding orders are 58.18 million deadweight tons and 204.60 million deadweight tons respectively, accounting for 37.7% and 35.5% of the global markets. In 2008, the nationwide accomplished shipbuilding amounted to 28.81 million deadweight tons, up by 52.2% year-on-year, up by 21.8% from the same period of 2007; the newly accepted shipbuilding orders reached 58.18 million deadweight tons, down 40.9% year-on-year; the holding shipbuilding orders 204.60 million deadweight tons, up by 28.7% year-on-year. Consequently, China’s accomplished shipbuilding and holding shipbuilding orders have kept rapid growth for six years in a row, with three big indicators having fully surpassed Japan, ranking the second in the world. With respect to export, in 2008, the export delivery value accomplished by China’s shipping industry enterprises stood at RMB212.2b, up by 56.1% year-on-year. The accomplished export ships stood at 21.07 million deadweight tons, up by 41% year-on-year, accounting for 73.1% of the total. The whole year’s ship export reached USD19.57b, up by 59.9% year-on-year. In terms of import, in 2008, China totally imported 2517 ships, down 2.3% year-on-year, slightly declining compared with the growth of 2007, with the tendency of decline quite obvious. From January to November of 2008, the nationwide shipbuilding industry enterprises above designated size reached 1240 ones, completing main business revenues of RMB300b, up by 56.4%, with the growth declining by 5.9% compared with 2007. Among them, the shipbuilding industry stood at RMB202.7b, up by 53.3% year-on-year; the ship auxiliary products manufacturing industry RMB32.8b, up by 78.6%; ship repair and ship dismantling industry RMB63.5b, up by 55.9% year-on-year. From January to November 2008, the shipping industry realized profits totaling RMB28.34b, up by 50.5%, with the growth falling by 7.1% compared with 2007. among them, the shipbuilding industry stood at RMB18.2b, up by 56.5% year-on-year; the ship auxiliary products manufacturing industry RMB1.8b, up by 97.9% year-on-year; the ship repair and ship dismantling industry RMB8.4b, up by 32.9% year-on-year; the enterprises running in the red reached 191 ones, with the amount of loss being RMB1.06b, up by 103.3% from the same period of 2007. Though Chinese shipping industry development generally maintains a good tendency, the impact of the international financial crisis on it has appeared, such as difficulty in shipping finance, significant decline of orders of new ships and increase of risks in performing contracts of ship delivery, thus the production and operation of shipping enterprises confront increasing difficulties, and in the coming 2-3 years, the development of the shipping industry will meet severe challenges. The Survey of Foreign Investment in China's Shipbuilding Industry in 2007 Published：2008-11-20 Origin：MOFCOM According to the statistics of MOFCOM, 140 foreign investment projects in Shipbuilding industry (Shipbuilding Industry (Code C375) hereinafter is in accordance with the National Economic Industrial Classification (GB/T4754-2202）.) were newly set up in 2007, 9 more than that of the same period in the last year, and the amount of the actual utilized foreign capital reached USD 554800,000, up by 47.14％ year-on-year. The number of newly established foreign invested enterprises and the amount of the actual utilized foreign capital accounted for 0.37％and 0.74％ of the national total number or amount of foreign capital absorption in the Shipbuilding industry during the same period.
According to the source of foreign capital, calculated by the amount of the actual utilized foreign capital, in 2007, countries or regions: Korea Rep, Hong Kong, Singapore, Br. Virgin Is, Netherlands ranked No.1 to No. 5 in the Shipbuilding industry regarding the amount of FDI, accounting for 46.99%, 26.65%, 6.51%, 3.94%, 3.84% of the total amount of the actual utilized foreign capital of the industry separately.
Figure 1 Main Source of FDI of the Shipbuilding Industry 2007
In Shipbuilding industry in 2007, ten Asian countries/regions (Hong Kong, Macau, Taiwan, Japan, Philippines, Thailand, Malaysia, Singapore, Indonesia and Korea) newly set up 108 enterprises in China, with the actual utilized foreign capital of USD 468060,000, up by 8％ and up by 43.2％ separately year-on-year. The number of the newly established enterprises and the actual utilized foreign capital accounted for 77.14％ and 84.37％ of the national total number or amount of foreign capital absorption in the same period.
The EU newly set up 11 enterprises in China, 11 more than that of the same period last year; the actual utilized foreign capital reached USD 38050,000, up by 72.02％ year-on-year. The number of the newly established enterprises and the amount of the actual utilized capital accounted for 7.86％ and 6.86％ of the national total number or amount of foreign capital absorption in the same period.
The US newly set up 1 enterprise in China, down by 87.5％ year-on-year; the actual utilized foreign capital reached USD 7300,000, up by 70.16％ year-on-year. The number of the newly established enterprises and the amount of the actual utilized capital accounted for 0.71％ and 1.32％ of the national total number or amount of foreign capital absorption in the same period.
According to regional foreign capital absorption, 134 foreign-invested Shipbuilding enterprises were newly set up in the Eastern area, with actual utilized foreign capital of USD 549100,000, accounting for 95.71% and 98.97% of the national total number or amount of foreign capital absorption in the same period. In the Eastern area, Liaoning Province, Jiangsu Province and Shandong Province ranked among the tops with respect to actual utilized foreign capital, had 25, 45 and 21 newly established foreign-invested enterprises separately, with the actual utilized foreign capital of USD 201720,000, USD 92830,000 and USD 91570,000, accounting for 36.36%, 16.73% and 16.51% of the total amount of the actual utilized capital of the industry in the Eastern area separately.
4 foreign-invested Shipbuilding enterprises were newly set up in the Central region, with actual utilized foreign capital of USD 5050,000, accounting for 2.86% and 0.91% of the national total number or amount of foreign capital absorption in the same period. In the Central region, Jiangxi Province, Hubei Province and Anhui Province ranked among the tops with respect to actual utilized foreign capital, with the actual utilized foreign capital of USD 3680,000, USD 760,000 and USD 610,000, accounting for 0.66%, 0.14% and 0.11% of the total amount of the actual utilized capital of the industry in the Central region separately, Among them, Jiangxi Province and Hubei Province had 1 and 2 newly established foreign-invested enterprises separately.
2 foreign-invested Shipbuilding enterprises were newly set up in the Western area, with actual utilized foreign capital of USD 650,000, accounting for 1.43% and 0.12% of the national total number or amount of foreign capital absorption in the same period. Chongqing ranked among the tops with respect to actual utilized foreign capital, had 1 newly established foreign-invested enterprise separately, with the actual utilized foreign capital of USD 650,000, accounting for 0.12% of the total amount of the actual utilized capital of the industry in the Western area separately.
Figure 2 Regional Foreign Investment Distribution (by Regional FDI Inflow) of the Shipbuilding Industry 2007
According to utilizing manners of the foreign capital, in 2007, there were 50 Chinese-foreign equity joint venture projects, 88 wholly foreign-invested projects, 2 Chinese-foreign contractual joint venture projects, which newly established in the Shipbuilding industry. in 2007, in the Shipbuilding industry, the amount of the actual utilized foreign capital in the Chinese-foreign equity joint venture projects reached USD121240,000; in the wholly foreign-invested projects reached USD433460,000; in the Chinese-foreign contractual joint venture projects reached USD100,000.
The Commitments to the WTO and the International Practice of the Shipbuilding Industry Published：2002-11-17 Origin：MOFTEC I. Tariff concessions Upon accession, the bound rates of import duties for finished oil tankers, crude oil tankers, liquefied national gas carriers, liquefied petroleum gas carriers, refrigerated vessels, motor container vessels, motor ro-ro carriers, motor bulk carriers are the same 9%, while the bound rates of tariff for other vessels and accessory equipments are unequal, from 3% to 9% respectively. The final bound rates for motorboats declined to 10.5% in 2002 from 12% upon accession, and the final bound rates for yachts and other vessels for pleasure or sports also declined to 10% in 2002 from 11.7% upon accession. II. Non tariff concessions(tariff lines, products description,deadline for elimination of tendering requirements)
2006 Global Shipbuilding Industry Survey Published：2007-06-11 Origin：By Expert Influenced by good performance of the world economy and international trade development, the shipping and shipbuilding market developed rapidly in 2006. In 2006 the growth rate of world trade was up to 9.7%, while that of shipping turnover volume was around 5%~6%. Meanwhile, fleet tonnage was increased by 6.1%; merchant vessel tonnage had reached deadweight tonnage of 960 million. From the perspective of supplies and needs, 2006 shipping market had reshuffled from the supplies of vessels couldn’t satisfy the needs of goods transportation to supplies basically balanced with needs. The trend is not optimistic. As for oil tanks, relationship between supplies and demands in oil conveyance market was not as tense as several years ago in 2006. After it dropped obviously in spring, the freightage rebounded in the mid year. Nevertheless, the freightage never soared; especially when it turned to winter there wasn’t any seasonal growth. At the end of the year, oil tanks fleet tonnage reached deadweight tonnage of 370 million. Because many ship-owners booked ships before CSR was officially enacted, the oil tanks orders in the year reached 79 million deadweight ton, up 100% over the year 2005. Among them VLCC was the most, reaching 30 million deadweight ton (in 2005 it was 10 million DWT). Prices of oil tanks stayed high. The 2006 growth rate of investment on oil tanks building reservation had peaked in the 30 years before. It was estimated the investment reached 50 billion USD. In 2007, now that the orders accepted in years before have completed in succession, newly delivered oil tanks will reach up to 27 million deadweight ton. Global transportation ability will be improved. Growth of oil tanks may lead to rolling down the freightage. When it comes to bulk carriers, since July 2006, the freight has rocketed up. Chinese imports of iron ore have grown rapidly while exports of steel and cement have increased, which positively affected the freight. In June 2006, China steel enterprises made agreement on that the price grew by 19% with three international iron ore production enterprises. After the price of iron ore was settled, imports started growing. Seeing from the outlook of China steel industry, great potential of importing iron ore exists. The shipping market of bulk carriers was directly influenced by the growth rate change of China iron ore imports and significant growth of bulk carriers’ tonnage. Because many ship-owners booked ships before CSR was officially enacted, the bulk carriers orders in the year reached 31 million deadweight ton, up 43% over the year 2005. Meanwhile, bulk carriers’ fleet tonnage reached up to 365 million DWT. As for container ships, the freightage held low, with an unoptimistic prospect. Due to vicious competition in some routes, the freightage reached the lowest in the second half of last year. Since the summer in 2006, both artery and branch routes in container ships shipping market have come across the embarrassing situation of severe full space and falling freightage. Some artery routes obviously put on pressure. The situation that the supplies overweighed the needs gradually emerged. Under the pressure, shipping companies started cutting the business of every route. Super container ships entering the market in succession broke the balance of supplies and needs in a further step. From the view of the supply, in 2006 the completion of container ships broke 1,000,000 TEU, reaching 1,010,000 TEU, which had been caused by the zealotry of building booking of super container ships years before. In 2007, it will reach up to 1,253,000 TEU, which will drive the growth rate of container ships fleet tonnage over 10%. Meanwhile, at present the order held by every shipyard reaches 4,300,000 TEU, accounting for 53% of the fleet for the time being. At present most of the super container ships on booking list have freight contracts (or charter), so they shouldn’t have had much risk. However, after 2007 the growth rate of shipping needs toward container ships may be less than that of the supplies. In 2006 when container ships shipping market turned out to fall, the building booking of large scale and super container ships did not, with endless orders. The order reached 22 million DWT in 2006, slightly above that in 2005. As for newly built vessels, since the beginning of 2006, prices have rebounded up and stayed high. In the first half of the year, shipyards in a lot of countries unanimously demanded ship-owners to raise the prices. Because the prices of various types of shipbuilding materials including marine paints continuously grew, shipyards were so confident and reasonable to bargain with ship-owners, let alone when it happened under the backdrop of there were sufficient orders and new rules were enacted. In 2006, orders of newly built vessels reached 140 million DWT, up more than 60% over the previous year. Besides that orders of three big cargo vessels grew, those of roll on/roll off ships and cargo vessels were increased by 7% compared with the same period last year. At the same time, prices of second hand ships and scrapping ships rocketed up. Chart 1. Distribution of New Ship Orders (by country) Denomination: ten thousand DWT
Estimated by information from Clarkson Chart 2. Distribution of New Ship Orders (by ship type) Denomination: ten thousand DWT
Estimated by information from Clarkson In 2006 the shipbuilding market was completely controlled by shipyards from South Korea, Japan and China. Orders of newly built vessels accounted for 93% of the whole world, with even higher proportion when it came to three big cargo vessels. From the perspective of orders held, at the end of 2006 the country holding the most orders of newly built vessels were South Korea, Japan, Chinese Mainland and Deutschland in turn. The held orders of newly built vessels were in total 5,371 ships, according to statistics by Fairplay, reaching 292 million DWT (304 million DWT according to Clarkson), setting a new record in history. The tonnage was increased by 32%. From the perspective of distribution of held orders, tonnage of South Korea, Japan and China altogether accounted for 90% of that of the whole world. 2006 saw the completion of newly built vessels reaching 73 million DWT, more than that in year 2005. It is the highest record in history, which had been caused by over high orders years before. Among the completed ships, bulk carriers outnumbered obviously those in 2005, reaching 23.1 million DWT. Oil tanks reached 25 million DWT, while container ships reached 15.8 million DWT. In addition, Chinese completion of newly built vessels may reach 15 million DWT, with a remarkable growth. Chart 3. Finished New Ships (by country) Denomination: ten thousand DWT
Source: Clarkson, etc. It is noticeable that in 2006 a batch of new rules and standards were enacted in the global shipbuilding industry. On April 1st, 2006 CSR was officially enacted, for which many ship-owners booked a bundle of new ships in advance. In May 2006, the remarkable IMO discussion on Ships Dedicated Seawater Ballast Tanks and Bulk Carriers Double Sided Premises Protective Coating Performance Standard was basically concluded. In December, the standard finally passed through on the MSC82 session held by IMO. It will be applied to the protection of seawater ballast tanks of all kinds of vessels above 500 total ton and sided compartments of high density cargo bulk carriers with length over 150 meters. The standard will be brought to enforce on July 1st, 2008 (new ships signed after July 1st, 2008 or those keeled after January 1st 2009 or those completed after July 1st 2012). However, according to rules set by IACS Common Regulation, the new coating standard will be applied to those vessels signed after December 2006 and appropriate for the standard. The enacting of the new coating standard will raise the prices of new ships by 2%~10% (maybe higher than the influence brought by CSR). Single ship building cycle will prolong to another 10 to 20 days. The production capability of shipyards may be reduced by 20%. Painting workers need to be added by 50%~100%. In addition, after the rule on duplication of bunker hull is enacted, the bunker hull of new ships signed after August 1st, 2008 or those starting to be built after February 1st 2008, or those completed after August 1st 2010 is required to be double-layered. The rule will raise the costs of new ships up about 5% and reduce their loading capability. |
