Japan's export ship orders jump again YoY in Oct

Their dismal performance this time last year led Japan's major shipbuilders to record in huge jump in orders for vessels for export in October equivalent to 971,040 million gross tons (GT) in 16 vessels, a more than 4.5 fold increase year-on-year, statistics just released by the Japan Ship Exporters' Association (JSEA) show.

That last month's orders were also 11.1% up on those for September suggests the sector is finally recovering. In October last year, the yards had secured orders for just 10 ships in 217,470 GT, lower by 42% from the previous month and by a huge 80% from the October 2021 total, as Mysteel Global reported.

"Last month's order volume was higher because of the low base last year when ship owners were stepping back from placing orders because of high material prices," a JSEA official said. "High material prices are still a concern… but (Japanese) shipbuilders still have negotiations ongoing, so we can expect a certain volume of orders in coming months," he said.

Last month, the Japanese yards also delivered 16 vessels, equivalent to 817,718 GT, higher by 9.6% from October last year and higher by 8% from September, the JSEA data show.

The positive trend in ship orders should be encouraging news for the Japanese integrated steelmakers supplying ship plates and long products such as bulb flats to the builders. The most recent Japan Iron & Steel Federation statistics show that orders for ordinary steel for the shipbuilding and marine equipment sector in August reached 237,000 tonnes, lower by 7.3% from July but higher by 5.1% on year.

However, the problem for the shipbuilders when competing for export contracts remains price. "About 70-80% of a vessel's price is for steel," the JSEA official noted. "China is the world's largest shipbuilder, and shipbuilders there are paying much less for ship plate than the builders in Japan," he said, arguing that ship plate prices in China are about Yen 40,000/tonne ($266/t) lower. "There is no way that Japanese builders can compete with them," he lamented.

Meanwhile, at the end of October, the Japanese builders were nursing orders for vessels for export totalling 515 ships in 22.3 million GT, the JSEA statistics show, sufficient to keep the yards in operation for 2.6 years.

hanyueran@mysteel.com
Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.