China only gets 1 ship? The global shipbuilding market is hit hard by the epidemic

2020-03-11 09:00

The global new shipbuilding market has been impacted by the COVID-19 pandemic. In February, global new ship orders plummeted, with Chinese shipbuilders receiving only one order, dropping from first place in January to fourth place globally.

Clarkson's latest data shows that the total global new ship orders in February were 18 vessels of 300,000 CGT, almost more than half less than the 33 vessels of 750,000 CGT in January.

Among them, South Korean shipbuilders received the most orders, with 8 vessels of 200,000 CGT, accounting for 67% of the global market share; Philippine shipbuilders rarely ranked second, with 4 vessels of 60,000 CGT, accounting for 19% of the global share; Japan ranked third, with 1 vessel of 30,000 CGT, accounting for 10%. In addition, Samsung Heavy Industries received orders for 3 shuttle tankers on February 28 this year, which are not included in the South Korean order statistics for February.

Chinese shipbuilders only received one order for an 8,000 GT 680 TEU container ship, dropping to fourth place globally. In contrast, in January this year, Chinese shipbuilders won nearly 70% of global new ship orders, with a total of 22 vessels of 510,000 CGT, ranking first globally.

Analysts believe that the reason for the sharp drop in orders from Chinese shipbuilders is that the outbreak of the epidemic in February forced Chinese shipbuilders to halt normal operations.

In the first two months of this year, the total global new ship orders amounted to 1.17 million CGT, a year-on-year decrease of 76%. From the cumulative order intake in the same period over the past three years, orders were 7.72 million CGT in 2018, 4.89 million CGT in 2019, and only 1.17 million CGT this year, showing a clear downward trend.

In terms of ship types, orders for Suezmax tankers and Aframax tankers increased by 33% and 70% year-on-year respectively, while orders for VLCCs and bulk carriers decreased. There have been no orders for large LNG carriers (above 140,000 cubic meters) this year. However, the industry predicts that large-scale LNG carrier orders from Qatar and Mozambique will be signed this year, and it is expected that South Korea's new ship orders will increase significantly.

As of the end of February, the total global backlog was 74.07 million CGT, a month-on-month decrease of 1.6 million CGT. Among them, the backlog of China, Japan, and South Korea decreased by 230,000 CGT (1%), 470,000 CGT (4%), and 680,000 CGT (3%) respectively.

Chinese shipbuilders' backlog is 26.16 million CGT, still ranking first globally, accounting for 35% of the global market share; South Korean shipbuilders are 21.28 million CGT, ranking second, accounting for 29%; Japanese shipbuilders are third, with a backlog of 10.91 million CGT, accounting for 15%.

Global new ship deliveries fell by 66% in February to 1.17 million CGT. This is a significant decrease of 66% compared to 3.49 million CGT in January. It is noteworthy that the completion volume of Chinese shipbuilders in February was only 3 vessels of 60,000 CGT, a significant decrease of 96% compared to 1.45 million CGT in January. South Korean shipbuilders' completion volume was 490,000 CGT, a month-on-month decrease of 64%. Japanese shipbuilders' completion volume was 320,000 CGT, a month-on-month decrease of 39%.

Industry insiders analyze that with the spread of the COVID-19 pandemic, the uncertainty in the new shipbuilding market is expected to increase this year. In addition, due to the sharp drop in international oil prices, the high value-added offshore equipment and LNG carrier markets may enter a stagnant state. The industry is concerned that although these adverse factors will not immediately appear, they may affect shipowners delaying or even stopping placing orders.

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