Newbuilding orders at Chinese shipyards have jumped in the first half of this year compared to the same period of 2015, according to figures released by the ministry of industry and information technology.
From January to June 2016, China’s shipbuilders landed new vessel tonnage amounting to 16.2m dwt, representing a surge of 44.7% compared to the previous corresponding period, the government figures showed.
More than 90% of the new orders, however, are concentrated in the hands of around 50 leading shipyards from among 94 main yards monitored by China Association of the National Shipbuilding Industry (Cansi).
While no official statistics are available, industry observers believed that a little more than 100 yards have active day-to-day operations, though around 300 are in operation.
In completed vessel tonnage, Chinese yards recorded 17.15m dwt of capacity in the first six months, down 7.4% year-on-year.
The shipbuilders’ orderbook backlog as at 30 June 2016 was at 119.26m dwt, a fall of 13.6% year-on-year and down 3.1% from the end of 2015.
China’s largest shipbuilding province Jiangsu also saw a spike in first half new orders for 42 ships with a total tonnage of 3.21m dwt, up 65.8% year-on-year.
The increase in new orders came amid the country’s shipbuilding industry going through a severe slump and consolidation phase with virtually all greenfield and speculative yards exiting the business.
Last year, more than 20 shipbuilding enterprises of large to medium sizes have declared bankrupt. And among those that failed, several are ‘white list’ shipyards that are supposed to benefit from prioritised access to domestic bank credit facilities.
The excessive yard capacity is still in need of deflation and more Chinese yards are expected to shut down or merge. The country’s two state-owned yards, China Shipbuilding Industry Corp (CSIC) and China State Shipbuilding Corp (CSSC), are already in the midst of merging their various subsidiaries so as to better utilise facilities and reduce resources wastage.
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