CHINA Shipping Container Lines' (CSCL) CNY4.2 billion (US$683.9 million) new order for five 18,400 container ships with Korea's Samsung Heavy Industries has given confidence to investors about the shipbuilding market.
Since the fourth quarter of last year, new orders for ships have increased and showed traces of recovery, However, the round of order is more based on cost control rather than on rise of demand. This means that a thorough change in the depressed market is still a long way ahead, said a report of Shanghai Securities News.
Clarkson's February newly-built price index climbed 0.2 points from January to 126.4 points, marking the first increase since June 2011. Since October last year, the index has been remaining around the low level of 126 points, indicating that the price of newbuilds might have hit the bottom.
An unnamed source from Shanghai Shipping Exchange (SSE) also confirmed that their statistics is showing a worldwide trend of growth since the fourth quarter of last year.
But does this means the shipbuilding industry which has long been troubled by overcapacity is seeing dawn coming? Experts from the industry pointed out that the rise of newbuilding orders tend to be out of the carriers' need to lower cost by using larger ships instead of a result of recovery of demand and rates.
The advantage of using larger ships lies in that the fuel cost per container will be reduced substantially. CSCL's new order is expected to optimise its fleet structures and better position itself towards the trend of larger ships in the container shipping industry.
Mainland's Changjiang Securities analysts Han Yichao said, it is still too early to say that a radical change in the gloomy shipbuilding is around the corner.
Another analyst from the firm Ji Yuntao said that demand is still weak, and most industry players are not doing well, and face increasing pressure from continuous delivery of new ships, thus a round of industry-wide orders for new ships is not likely to happen.
China's orders are mainly for bulk carriers. SSE's analyst noted that bulk shipping market is still deeply troubled by overcapacity with BDI lingering below 1,000 points. What hope there is for recovery is short-term. Foreign financial institutions statistics show world shipping volumes and demand keeps rising, but there's no sign dramatic improvement in the carrier's 2013 results expected.
SHIPBUILDING
16 May 2013 - 22:56
Ship orders show trace of recovery, but no big shift expected soon
CHINA Shipping Container Lines' (CSCL) CNY4.2 billion (US$683.9 million) new order for five 18,400 container ships with Korea's Samsung Heavy Industries has given confidence to investors
SHIPBUILDING
16 May 2013 - 22:56
Ship orders show trace of recovery, but no big shift expected soon
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