Japan's FY'22 ship orders for exports fall 18%

The total order volume of new vessels for exports secured by Japanese shipbuilders during their last business year ending March 31 reached 11.74 million gross tons (GT) in 280 vessels, new data from the Japan Ship Exporters' Association (JSEA) showed.

Though the total was lower than fiscal 2021's six-year high of 14.29 million GT in 313 ships, it was still a reasonable result given global financial and geopolitical stresses, the association believes.

"March orders alone were down on month, but they were still 20% higher than February. So it's clear that a certain level of new ship demand exists," a JSEA official remarked. "The (order) backlog has also increased -- it's now equivalent to about 2.4 years -- so shipbuilders should be able to keep their operations at a high level," he added.

Actual vessels delivered during the year to end-March declined by 9.4% to reach 8.38 million GT in 189 vessels, the JSEA data showed.

The most recent statistics from Japan Iron & Steel Federation showed that orders for carbon steel from the shipbuilding and marine equipment sector placed in January totalled just 220,000 tonnes, down by 19% from December, as reported.

Moreover, the forecast for domestic steel consumption for the shipbuilding industry during the current quarter to end-June tabled on Tuesday by Japan's Ministry of Economy, Trade and Industry puts the total at 684,000 tonnes, lower by 9.2% from the same quarter last year and off 1.2% from the January-March result.

So clearly, the shipbuilding industry's steel consumption this quarter is unlikely to cheer the country's steelmakers.

Yet the builders' order backlog at 22.16 million GT in 498 vessels is still the highest this has been since 2018, the year when Japanese yards were holding orders totalling a huge 34.42 million GT in 716 ships, Mysteel Global noted.

"Also, ships that were built and delivered around 2010 will need to be replaced between now and 2030, so new vessel orders are expected in coming years," the JSEA official explained. "We just hope the Russia-Ukraine conflict ends soon, so vessel distribution will return to normal and more demand may appear," he said.

Japanese shipbuilders' backlog until FY'27 (March 2028)

Source: JSEA

Written by Russ McCulloch,russ.mcculloch@mysteel.com

Edited by Zhenqi Yang,yangzhenqi@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.