Chinas
shipbuilding plate market may see significant decreases in the upcoming months due to the sluggish
freight market in the first half and expected
production increases in the second half.
Currently, Japanese
shipbuilding plate is offered at around $720/ton FOB
China. Such a price should be regarded as a support for the market since the domestic price of
shipbuilding plate in
Japan is around $550/ton. According to the latest news, South
Koreas Dongkuk Steel decreased its
shipbuilding plate price by $29/ton, while
Japans Sumitomo increased its prices by $45.5/ton yesterday. The moves by both companies should bring global
plate prices closer to convergence as Dongkuks
shipbuilding plate price fell to $632/ton while Sumitomos price climbed to $547/ton.
Influenced by the drop off in international
freight during the first half of this year, the prices of newly built ships experienced a notable adjustment in June. On June 10, Clarksons Research Studies indicated a
trading price reduction for newly built ships after 33 consecutive months of price increases. Buyers have adopted a wait-and-see attitude towards the
shipbuilding market.
Meanwhile major global
shipbuilding companies AP Moller-Maersk and Royal P&O Nedlloyd N.V obtained approval in August to merge. Furthermore, German shipping company TUI is carrying out transactions to buy Canadian CP Ships Limited. Experts predict that there will be some adjustments in the international
shipbuilding market, that the trade volume will decrease somewhat yet the ship capacity in the market will increase. Therefore, we will face either idle capacity or low
freight rates, either of which will discourage more
shipbuilding. Therefore,
shipbuilding prices will be in a downward trend.
Although
shipbuilding plates require higher quality and have more technical barriers than medium
plate,
Chinas domestic steelmakers are trying their best to overcome such difficulties in order to produce more
shipbuilding plate because of the greater profit margin. Therefore, some steelmakers will start to abandon medium
plate and focus instead on
shipbuilding plate production. This will in turn cause an increase in
shipbuilding plate supply and soften the prices.
China produced 2.82 million tons of
shipbuilding plate in the first seven months of this year, up 51 percent year on year. Current 8 mm
shipbuilding plate prices in Shanghai are around RMB 42804330/ton. Xinyu Steel-origin products saw a decline of RMB 70/ton over the past week, while Shanghai No. 3 products fell around RMB 20/ton. 8 mm
shipbuilding plate prices in Guangzhou are around RMB 4750/ton. For reference, the prices at the beginning of April for 8 mm
shipbuilding plate were around RMB 6250/ton ($755/ton) in Guangzhou and RMB 6070/ton ($733/ton) in Shanghai.