China Shipbuilders See Record Order Low

Chinese shipyards received only 730,000-DWT new ship orders in October, marking the monthly lowest in 2011 and signaling the gloomy industry although ship stocks like CSSC Jiangnan Heavy Industry Co., Ltd. (SHSE: 600072) hit the limit-up on November 29.
In Yueqing, a city in the Yangtze River Delta where the industry was once prosperous, half of shipyards have suspended operation because of the sluggish demand.
The whole industry has been confronted without enough orders. Experts predicted that extremely shrinking orders would show an increasing influence in the following three years.
In the first ten months of 2011, Chinese shipbuilders received orders for 29.75-million-DWT new ships, stepping down by 45.5 percent year on year, according to the China Association of the National Shipbuilding Industry (CANSI).
In 2010, however, their new ship orders amounted to 75.23 million DWT, with the monthly average standing at 6.2692 million DWT.
From January to October 2011, however, newly-ordered ships had been outpaced by ships completed by Chinese shipbuilders for ten consecutive months.
By the end of last month, Chinese shipbuilding companies had had to-be-fulfilled orders for 165.30 million DWT, falling by 15.9 percent from those at the end of October 2010 and by 15.6 percent from those at the end of last year.
Earlier this year, the National Development and Reform Commission (NDRC), the country's macro-economic planning body, announced the operation data of the shipbuilding industry.
From January to August, 43.16-million-DWT ships were built across the country, climbing up by 6.9 percent from a year earlier. In August alone, delivered ships declined by 9 percent year on year to 4.7 million DWT.
New ship orders that Chinese shipbuilders won declined by 36.9 percent to 28.07 million DWT in the first eight months of this year. The August new ship orders saw a drop of 60 percent on a yearly basis to 4.49 million DWT.
In the eight months, 1,526 state-owned and state-controlled shipbuilding companies and non-state shipbuilding firms in China, each with CNY 5 million annual sales, achieved a total industrial output value of CNY 506.4 billion, rising by 25.3 percent from a year earlier. They delivered CNY 215 billion ships, up 18.6 percent year on year.
China's ship export totaled 36.43 million DWT in the first eight months of 2011, accounting for 84.4 percent of the country's total output. Newly gained ship orders for export hit 21.47 million DWT, making up 76.5 percent of all the new orders received by Chinese ship yards.
Their to-be-fulfilled orders for ship export stood at 147.3 million DWT, accounting for 83.8 percent of the total in hand.
Additionally, large Chinese companies in the industry accumulatively completed a gross industrial output value of CNY 377.4 billion in the first half of 2011, increasing by 24.8 percent year on year.