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Chinese yards newbuilding orders down 77.4% in first five months

Chinese yards newbuilding orders down 77.4% in first five months
New shipbuilding orders continued to shrink at China’s shipyards in the first five months of this year, according to data from China Association of The National Shipbuilding Industry (Cansi), as the sector battles an ongoing downturn.

From January to May 2015, Chinese shipbuilders received 7.86m dwt in newbuilding tonnage, a plunge of 77.4% compared to the same period of 2014, statistics from Cansi showed. The fall was similar to the 78.1% decline in the first four months from the year-ago period.

Up until 31 May, Chinese shipyards sat on an orderbook of 138.18m dwt, a decrease of 8.2% year-on-year, and down 7.5% from the end of 2014.

In the first five months, Chinese yards completed vessel tonnage amounting to 15.48m dwt, an increase of 18.9% compared to the same period of last year, Cansi figures showed. Among the total, 14.08m dwt were exported.

The shipbuilder’s association highlighted that a smaller group of 54 leading shipyards received newbuilding orders of 6.73m dwt in the first five months, up 80.1% year-on-year, and accumulated an order backlog of 136.46m dwt, down 7.3%.

The 54 leading yards completed 14.31m dwt of newbuilding capacity during the five-month period, representing an increase of 14% over the previous corresponding period.

Cansi further monitors 88 main shipyards and revealed that their combined completed newbuilding tonnage was valued at RMB163bn ($26.31bn) in the January-May period, up 5.5% year-on-year, with exports valued at RMB68bn.

The 88 main yards also generated a combined revenue of RMB102bn in the first five months, a climb of 4.4%. Net profit, however, dropped by 17% year-on-year to RMB2.06bn due to high operational costs and stiffer competition.

There are presently a total of 1,441 Chinese yards under Cansi’s database, and they achieved a total revenue of RMB189.1bn in the first five months, up 5.6% year-on-year. Shipbuilding took up RMB122.9bn of the revenue, while ship equipment and ship repair accounted for RMB28.6bn and RMB5.65bn of revenue, respectively.

Net profit, however, dropped by 8.4% year-on-year to RMB6.63bn for the 1,441 yards, for similar reasons as the 88 main yards.

The number of yards at 1,441 that Cansi took record of in the first five months was down from the 1,486 figure that it mentioned in the first two months, indicating that the country’s shipbuilder sector is shrinking as a result of the ongoing consolidation.