Summer lull slashes Japanese ship orders

The Japanese shipbuilders had a woeful August for orders for new vessels for export, concluding deals for just 14 ships, equivalent to 390,580 gross tons (GT), data released on September 13 by the Japan Ship Exporters' Association (JSEA) show, with the total lower by a large 21.4% on the year. Moreover, the total was just over half the volume of 23 ships in 752,650 GT that the builders had won in July, as Mysteel Global reported.

"We had expected that orders in August would decrease because European buyers were on holidays, so we're not so surprised at the result," a JSEA official said. "But the high prices of steel and other materials and equipment used in vessel construction are delaying negotiations or decreasing the appetite of buyers for placing orders, that's for sure," he admitted.

The August result took the total orders won by JSEA member firms during January-August this year to 6.27 million GT in 164 vessels, nearly 30% lower than during the first eight months of last year. On the most recent Japan Iron & Steel Federation (JISF) statistics, orders for ordinary steel for the shipbuilding and marine equipment sector placed during January-June this year reached 1.38 million tonnes, compared with 1.41 million tonnes during the first half of last year.

Nevertheless, the JSEA official was hopeful that the builders would weather the storm, pointing out that eight of the 14 orders received in August were placed by overseas owners - as opposed to Japan-based owners who would register the vessels overseas. "Some buyers, such as those in Greece, seem still active to book bulk vessels, and Japanese shipbuilders are hoping to receive more orders. I've also heard that some large orders for container vessels are close to being concluded," he added.

Meanwhile, the volume of vessels the Japanese yards actually delivered last month equalled just nine ships in 228,375 GT, lower by a huge 60% from August 2022 deliveries. The total was also less than 20% of the volume delivered in July of 1.16 million GT.

At the end of August, the decline in deliveries last month meant that the volume of vessels for export in Japanese shipbuilders' backlog totalled 512 ships in 22.1 million GT, the JSEA data show, sufficient to keep the yards busy for 2.6 years. "Building operations should stay active, but the shortage of workers remains a big headache and it may delay construction schedules," the JSEA official remarked.

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

Edited by Alyssa Ren, rentingting@mysteel.com

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