China State Shipbuilding Says Orders Up By 'Large Extent' Over Last Year's

China State Shipbuilding Corp.’s orders improved by a “large extent” from a year ago as the global economy and shipping business recovered, a company executive said. The state-owned company has won orders of about 40 million deadweight tons through the year 2012, compared with a “few million tons” for 2009, Cao Yousheng, head of the company’s policy research office, said in an interview in Shanghai today.
Chinese shipyards almost doubled production in the first four months of the year as the end of the credit crunch and rebounding global trade revived demand for new ships. The government is developing the local shipbuilding industry in a bid to surpass South Korea as the world’s largest maker of ships by 2015.
“Ship prices have rebounded to 2004 levels, but are unlikely to reach those of 2008,” when the Chinese shipbuilding industry peaked, Cao said. A revival in shipbuilding has helped bolster steel prices, he said.
“Most Promising”
Dry bulk ships account for almost 80 percent of all the group’s new orders because of strong demand for iron ore and coal in China, he said. The company doesn’t expect any cancellations this year, after 5 percent of 2009 orders were canceled, he said.
Tankers may be “most promising” in the next few years with an increase in oil projects, said Wang Yanguo, deputy head of science and technology at the Beijing-based company.
China State Shipbuilding is in talks to sell two liquefied natural gas carriers for more than $200 million each, Wang said. The potential purchasers, BG Group Plc and China National Offshore Oil Corp., will use the ships to serve Australia, he said.
BG and China National signed an agreement in March for the supply of 3.6 million metric tons of Australian LNG annually from BG’s venture in Queensland for 20 years starting in 2014.
BG will supply fuel to China National Offshore using gas extracted from coal seams in Queensland and liquified by BG unit QGC for export by ship.