In a recent development, several domestic shipbuilding companies, including Rongsheng Heavy Industry and Jinhai Heavy Industry, have secured significant orders totaling nearly $1.8 billion. According to data released by the China Shipbuilding Industry Association on May 20th, as reported by *Daily Economic News*, from January to April this year, the country completed 10.36 million DWT of shipbuilding, representing a 24.9% decline compared to the same period last year. However, new ship orders surged by 160%, reaching 30.3 million DWT during the same time frame. At the end of April, the backlog of ships under construction stood at 150.15 million DWT, up 43.2% year-on-year and 14.6% from the end of 2013.
Amid this surge in orders, the performance of Chinese shipbuilding firms has started to show signs of improvement. The China Shipbuilding Industry Association reported that key enterprises in the sector achieved a revenue of 83.2 billion yuan from their main business activities between January and April, an increase of 20% year-on-year. Meanwhile, total profits reached 2.2 billion yuan, marking a 5.7% rise compared to the previous year.
This trend raises the question: is the Chinese shipbuilding market finally emerging from its slump? Zhang Guangqin, president of the China Shipbuilding Industry Association, told *Daily Economic News* that while the number of new orders is growing rapidly, he expects the growth rate to slow down in the coming months. "As ship prices recover, shipowners are becoming more cautious about placing new orders," he said.
Several international shipping consultants have echoed this sentiment, warning that the large volume of new ship orders could threaten future market stability. Reports from these agencies suggest that the current wave of demand may not be sustainable, as some shipowners are waiting for prices to drop before committing to new contracts.
Recent news highlights the success of several major Chinese shipbuilders. On May 19, Jinhai Heavy Industry signed a deal with CMACGM, a subsidiary of HNA Group, for three 2,500 TEU ice-class container ships worth approximately $100 million. Additionally, Jiangsu Zhonghai Industry received orders for six 9,400 TEU ultra-large container vessels, valued at around $520 million.
Rongsheng Heavy Industry also made headlines by securing a contract for a 64,000 DWT bulk carrier with a European shipowner. This brings the total number of such ships ordered to 36, including 24 firm orders and 12 options, with a total value of about $1 billion. The Greek shipowner who placed the order had previously signed a deal for 18 ships in September 2013, later increasing it to 36.
Lei Dong, director of Rongsheng Heavy Industry's office, noted that the recovery in the dry bulk market has led to increased demand for energy-efficient vessels. As a result, Rongsheng has seen improved payment terms and transaction volumes. To meet the demand, the company has dedicated its entire No. 4 dock to production, aiming to deliver up to nine ships annually.
Moreover, Rongsheng continues to deliver vessels under existing contracts. For example, it recently delivered a 157,000 DWT Suezmax tanker to Norwegian shipowner Frontline and the first of two similar vessels to Greek shipowner Cardiff. The company is also working on additional orders, including two 400,000 DWT VLOCs for Vale, scheduled for delivery in June 2015.
Despite the positive developments, industry insiders caution that Rongsheng’s long-term success depends on securing more new orders and maintaining strong banking support.
However, concerns remain about overcapacity in the global shipping market. While new orders have risen sharply, the issue of excess supply has not been resolved. Shipping companies continue to face losses, and ship prices remain low. According to data from British brokerage firm Clarkson, global new ship deliveries are expected to reach 299 million DWT this year, pushing total fleet capacity to 1.7 billion DWT—an increase of 17.6%. If global trade growth remains around 4% per year, the market could face another oversupply crisis after 2016.
Industry experts warn that while the fundamentals of the ship market are improving, the massive wave of new orders poses a risk to future stability. A domestic shipbroker noted that the future of the global shipping market will largely depend on China, which has become a major player in the dry bulk market. However, whether China can sustain the demand needed to absorb the growing shipbuilding capacity remains uncertain.
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Material of Sliding bar:
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Brass
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Surface treatment
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Chrome plated
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Material of Shower Holder:
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size:
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different sizes for selection
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Quality guarantee:
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5 years
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Salty Test:
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ASS 24H
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Package:
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Inner packing: bag, white/brown inner box
Outer packing: kraft carton
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OEM/ ODM service:
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laser logo on handle/body is available
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