Only 112 remain! The number of active shipyards in China has fallen to its lowest level in 15 years

2018-05-21 09:00

The number of active shipyards globally continues to decline. In China, the number of active shipyards has fallen to 112, a 15-year low. Simultaneously, the number of active private shipyards in China has sharply decreased, while the number of active state-owned shipyards has reached its highest level in 18 years. The Chinese shipbuilding industry is truly experiencing a tale of two cities.

Clarksons, in its recent report, stated that since the global financial crisis, the number of active shipyards globally (with at least one 1000+ GT vessel in their order book) has rapidly declined, reaching 350 by early April of this year. This trend is particularly evident in China, where many independent shipyards are finding it increasingly difficult to secure new orders.

Clarksons data shows that by early April, the number of active shipyards in China had fallen from 391 at the beginning of 2009 to 112, the lowest level since 2003. Among the three major shipbuilding countries of China, Japan, and South Korea, China saw the largest decrease in the number of active shipyards. During the same period, the number of active shipyards in South Korea fell from 39 to 14, and in Japan from 70 to 55.

However, the situation varies significantly among different Chinese shipyards. From the beginning of 2009 to early April of this year, the number of active state-owned shipyards, including CSSC and CSIC, decreased from 52 to 44, while the number of active independent shipyards plummeted from 305 to 50, a decrease of 85%. The number of active joint ventures, foreign-invested, and local government shipyards decreased from 34 to 18. Therefore, by early April, government-backed shipyards accounted for 40% of the total number of active shipyards in China, the highest level since 2000, compared to 13% at the beginning of 2009.

Top 20 Shipyards in China by Order Book (as of early April)

Data Source: Clarksons

Data shows that although the overall order volume of Chinese shipyards has decreased, state-supported shipyards received a total of 255 vessels and 6.3 million CGT last year. In terms of CGT, this accounted for 59% of the total order volume, significantly higher than 31% in 2009. This is due to support from government-related orders. In contrast, independent shipyards' order intake last year decreased to 177 vessels and 3.4 million CGT, accounting for 31% of the total, down from 50% in 2009. Among the top 20 shipyards in China by order book as of early April, 12 are state-owned, 6 are privately owned, and 2 are solely or jointly invested enterprises.

Meanwhile, independent shipyards are accelerating consolidation. In 2017, two shipyards, New Yangzi Shipbuilding and New Times Shipbuilding, accounted for 70% of the order intake (in terms of CGT) of independent shipyards, while in 2009, the same proportion came from more than 30 shipyards. As a result, the proportion of state-supported shipyards' order book in the national total has increased from 44% at the beginning of 2009 to 57% in early April this year, returning to the level of 2006.

According to previous Clarksons statistics, at the beginning of 2009, when the shipbuilding cycle was near its peak, the number of active shipyards globally reached a high of 934. By 2007, this number had decreased to 860. By early September 2016, it further decreased to 402, more than half, with an average annual decrease of more than 60. The September 2017 statistics showed 357, the lowest number ever recorded. The latest data as of early April is 350, a decrease of only 7 in six months, indicating that the rate of decrease in the number of active shipyards has significantly slowed down, also showing that the new shipbuilding market has begun to stabilize and recover.

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