Review on Chinese shipbuilding plate market in 2009

It is reported that domestic market price for shipbuilding plate continued to rise at the beginning of 2008 with rocketing outputs.
 In February, benchmark price for fiscal 2008 was settled to rise by another 65%, under which domestic steel product market prices. Shipbuilding plate prices continued to go up and hit record high. Price for 20 millimeters shipbuilding plate reached CNY 7200 per tonnes in Mid June, which last one month, up 40% YoY and 31% from the price level at the beginning of this year. During the period, shipbuilding plate outputs kept rising with monthly outputs up 100% MoM from January to May.
Therefore, shipbuilding plate outputs amounted to some 10.507 million tonnes during the H1, up 121.4% YoY. By the end of July, outputs of shipbuilding plate have approximated the total outputs of 2007.


As a matter of fact, domestic economy presented signs of a downward trend early at the beginning of 2008. Owing to the combined influence of the extraordinarily severe ice disaster that never happened in the past decades, the deadly earthquake in Sichuan and central government＇s measures aiming at preventing domestic economy from overheating as well as a hedge against inflation, normal decreasing economy growth was acceptable without lowered expectation. However, domestic economy growth continued to slow down during the H2, casting serious impact on the whole industry. Steel product prices then started to dive. 


Demand for shipbuilding plate did not plummet like those for other steel products. From January to September about 16.82 million deadweight tonnes of ships were finished, up 40% YoY. Under such circumstances many steel makers turned to shipbuilding plate production, directly resulting in the oversupply and falling price. Shipbuilding plate price began dropping in late July and remained at some CNY 6200 per tonnes at the end of September, down 13.9% from the highest level. The price did not stop falling until November after Chinese government started large scale plans to rescue the market. However, because of the price gap between shipbuilding plate and common-carbon plate, shipbuilding plate price kept sliding and nearly approximated the price for common carbon plate. On December 15th, shipbuilding plate was posted at some CNY 3850 per tonnes, a little higher than price of CNY 3800 per tonnes for common plate. By then, price for shipbuilding plate has already gone down by 46.5% from the highest level. Outputs of shipbuilding plate totaled some 18.53 million tonnes from January to November, up 65.8% YoY.


In November, there were only 800 000 deadweight tonnes of orders, accounting for 6% of monthly level in 2004, down 95.6% YoY and 78.5% MoM. At the same time, price for new ships also shifted to a downward trend in September, in November, price for oil tanker, bulk cargo ship and container ship slid by 5.5%, 8.4% and 4.0% respectively. During recent years, China boasts great demands for shipbuilding plate. Outputs of shipbuilding plate have been higher than outputs of common medium plate. It is expected that the total outputs in 2008 will approach 20 million tonnes, up 65% YoY.
Actually, common shipbuilding plate has been oversupplied while high end shipbuilding plate is still in short supply. Influenced by the worldwide economy recession, shipbuilding plate exports are also blocked. Therefore, a rosy outlook on shipbuilding plate market in 2009 is poorly.