China's new ship orders plunge 42% y-o-y in Q1 CY'22

In the first quarter of 2022, Chinese shipbuilders received new vessel orders totaling 9.93 million deadweight tons (DWT), down by a hefty 42.3% on year, according to the latest data from the China Association of the National Shipbuilding Industry (CANSI), released on its official WeChat account on April 19. The decline was also steeper than the 17% on-year fall for January-February.

"The global demand for new vessels weakened in the first quarter amid uncertainties in the international situation and significant declines in the trading volume of dry bulk commodities worldwide," a Shanghai-based analyst said. "There was also a high base number in the corresponding period of last year (so) new orders in Q1 dwindled markedly on year."

With the slump in new orders received by the Chinese shipyards, the backlog held by all builders gained but at a slower pace, rising by 26.3% on year to reach 99.1 million DWT by the end of March, against the 38.8% on-year rise during the first two months, according to the CANSI data.

Meanwhile, Chinese shipyards also saw their completed vessels decrease over January-March, though down just 1.9% on year to 9.61 million DWT, according to CANSI.

Though most shipbuilding enterprises said that their construction activities have not been affected by the COVD-19 pandemic, their operations cannot meet expectations due to the restricted supplies of input materials caused by traffic controls and lockdown measures, according to sources.

In terms of vessel types, during the first three months, bulk carriers were the largest segment in both completed vessels and new orders, with the bulkers' share standing at 63.6% and 47.4% of the totals. In addition, oil tankers accounted for 21.1% of the completed ships, and container ships' share of new ship orders was 25.2%, CANSI said.

During Q1 among the Chinese builders, export business accounted for 86.1%, 87.4% and 89.6% of all the new vessel orders, order backlogs, and completed vessels, CANSI's statistics showed.

The total value of Chinese ships exported over January-March amounted to $4.71 billion, down 2.2% on year. Among the total, the export of bulk carriers, oil tankers and container ships remained crucial, with the export value of these types of ships exceeding 60% of the total.

In Q1, the domestic shipbuilders saw their total new orders, backlog and completed vessels account for 48.6%, 47.3% and 46.2% respectively of the world's total, the CANSI data showed.

CANSI also noted that enterprise concentration in China's shipbuilding sector stayed high, as the country's top 10 shipbuilders won 74.4% of all the new orders secured in Q1. In addition, the top 10 accounted for 77.3% of the completed vessels during the same period.

Written by Rong Zhang, zhangronga@mysteel.com

China's three major shipbuilding indicators in Q1
Unit: 10,000 tonnes DWT

Source: CANSI
Note- This article has been published under an article exchange agreement between Mysteel Global and SteelMint.