Chinese shipbuilding stimulus to boost SBQ plate market

According to Mr Li Zhongshuang, GM of Shanghai Ruikun Metal Material Co Ltd National revitalization plan on ship industry will definitely push up shipbuilding plate market in the long term. But, domestic shipbuilding steel market, esp. ship plate market, won't recover at once. Mr Li said after suffered a lot from global financial crisis, China's ship industry is to face the hardest year. However, the revitalization plan comes on to help the industry overcome the period. And it still aims to materialize the industrial shift from being big to being-strong around the world.
It's expected that ship orders in this year will further shrink from last year's fall. In 2008, China's ship output posted over 40 million DWT while fresh orders might post only 20 million DWT to 30 million DWT.
Mr Li said financial support is one of important parts of the plan. It's stressed to encourage institutes to give credit for ship buyers. Meanwhile the fiscal aid policy on oceangoing vessel business within China will prolonged to 2010. The moves will boost demands for ship industry and ease off market worries on profits. They are to stabilize market expectation and good for market recovery.
Besides this, it's still pointed out to extend ship demands by sweeping out old vessels and single-hull oil tankers. And it is also encouraged in the plan to exploit oversea market by developing specialized ships based on the R&D of high-tech & high value-added vessels. In global oceaneering equipment market, the state will bolster shipbuilders to develop the new jack-up drilling platform and tap oceaneering power and drive system by special fund. These efforts will speed up the sustainable development and make the industry be a great power in the future.
Mr Li concludes that the revitalization of ship is to spur steel's come-back in a long term. At present, ship plate market shows mild movements in prices as per Mr Li's investigation on post-festival market.
In this week, Mr Li's company, which majors in ship plate sale, sells products from Baosteel and Xinyu Steel like that: 8mm at CNY 4400 per tonne, 10mm at CNY 4300 per tonne; 12mm at CNY 4150 per tonne; 14mm to 20mm at CNY 4100 per tonne. 12mm from other mills goes at CNY 3950 per tonne to CNY 4000 per tonne; 16mm sheet at CNY 3900 per tonne in Shanghai.
Shipbuilders' feedback shows some builders resume production after Spring Festival, increasing steel demands. Mr Li anticipates the trades of ship plate will be better next week. However, the oversupply still exists in the market. And the plan need time to arouse the demands. Thus, the ship plate market isn't likely to rebound in short term.