Chinese demand for new vessels to remain strong
The global ocean shipping industry will be brisk over the next fifteen years and ship prices will be stable, suggests a recent report from the International Ocean Shipping Consulting Company.
As the world economy continues to expand, developing countries such as
China and developed countries such as the US,
Japan and EU members will have a great demand for oil and natural gas, providing more opportunities for the ocean shipping industry. In fact, the annual growth rate of world transportation capacity in the following fifteen years is predicted to be around 40 percent.
During 2006-2010, world annual demand for new vessels is expected to be 50.22 million deadweight tons. However, from 2011-2015 annual demand for new vessels will likely drop to 39.18 million deadweight tons.
Chinas annual demand for new vessels during the next five years will be 6.2 million deadweight tons. Unlike the global trend, however,
Chinas annual demand for new vessels will continue to increase from 2011-2015, reaching 8.4 million deadweight tons.
During 2000-2005, annual demand for new oil tankers was 7.15 million deadweight tons, accounting for 41 percent of the total demand. Bulk-cargo ships made up 20 percent of total new demand, followed by container vessels at 16 percent. Changes in the output of the
shipbuilding industry will see bulk carrier capacity increase 5.9 million tons annually, while container vessels will add 4.55 million tons annually. As such, in 2006-2010, the proportion of oil tankers will likely fall to 32.5 percent, while demand for new bulk carriers and container vessels rise to 27 percent and 16.5 percent, respectively.
The price for vessels is definitely in a downward trend due to the increasing market shares. However, prices of bulk carriers will remain strong in the short term due to the brisk ocean shipping industry.
The price of very large crude carrier (VLCC) might reach $90 million by 2010, but within ten years is expected to settle in the $70-85 million range. The price of Panamax size vessels is expected to be $22.5 million in 2005 2008, but could reach $24.5 million. The price will likely settle at $22 million by the end of 2015.
Japan and South
Korea have dominated the world
shipbuilding market for many years. South
Koreas influence on the
shipbuilding market is increasing, especially for oil tankers and container vessels. South
Korea is competitive in both price and building capability compared to
Japan. In recent years, orders placed with South
Korea have accounted for 80 percent of the world total volume. Therefore, South
Korea and
Japan will continue to dominate the international
shipbuilding market.
Table 1 Shipbuilding plate consumption Unit 1000 tons
Year Steel for shipbuilding Ship plate Ship plate
consumption consumption growth rate (%)
2000 1600 1400 18.2
2001 1960 1730 19
2002 2230 1960 12
2003 3170 2700 27
Table 1 shows that
Chinas
shipbuilding plate demand in 2003 was 2.7 million tons. However,
China only produced 1.75 million tons of
shipbuilding plate that year, meaning many large-scale
shipbuilding factories had to import to meet their needs.
China State
Shipbuilding Corporation (CSSC) expects that demand for
shipbuilding plate in 2005 will be four million tons.
SteelOrbis Shanghai