China CSSC May Post 18-Fold Jump in Orders at Jiangsu Shipyard This Year

China CSSC Holdings Ltd., the nation’s biggest shipyard, may post an 18-fold jump in orders at its Jiangsu province unit this year as rebounding global trade encourages lines to add more vessels. Chengxi Shipyard Co. has won orders for 32 ships this year and is in talks for at least five more, Deputy General Manager Lu Ziyou said at a Sept. 12 vessel launch in Jiangyin in eastern China’s Jiangsu province. Capacity expansion has also helped the yard, which mainly makes dry-bulk ships, win more deals, he said.
The shipyard will probably win a similar number of orders next year, Lu said, as a 22 percent jump in commodity-shipping rates over the past year spurs demand. China CSSC and other Chinese shipbuilders have also won market share from more expensive yards in South Korea, the world’s biggest shipbuilding nation, helping them boost orders fourfold this year.
“Demand for dry-bulk carriers is rising this year led by Chinese imports of iron ore, coal and grains,” Lu said. “We expect demand next year to remain stable.”
Chengxi only won orders for two ships last year as the global recession hammered trade. The yard delivered 12 ships in 2009, the highest tally for a China CSSC unit after Shanghai Waigaoqiao Shipbuilding Co.’s 34 vessels.
China CSSC rose 3 percent yesterday in Shanghai trading to 61.45 yuan. The stock has fallen 21 percent this year.
On Sept. 12, Chengxi handed over a 53,000-deadweight-ton handymax dry-bulk ship to Wah Kwong Maritime Transport Holdings Ltd. The Hong Kong-based shipping line, which had traditionally bought ships from Japan or South Korea, ordered a Chinese-built vessel because of lower prices, William Fairclough, investor relations and business manager, said at the launch.
A handymax would likely cost less than $30 million from a Chinese yard today, compared with more than $35 million in Japan or South Korea, he said.
China’s new shipbuilding orders rose to 44.5 million deadweight tons in the first eight months the year, the Ministry of Industry and Information Technology said on its website yesterday.