Overview of China's shipbuilding industry in 2021

Industry profile

1. Definition

Ship is a general term for all kinds of ships, refers to the means of transportation that can sail or berth in the waters for transportation or operations, and has different technical performance, equipment and structural types according to different use requirements.

Shipbuilding industry, that is, shipbuilding industry, is a modern comprehensive industry, but also the combination of military and civilian strategic industry. As an important industry related to national economic development and national defense security, shipbuilding industry provides necessary technical equipment for Marine development, shipping transportation, energy transportation, national defense construction, etc., and is an indispensable and important component of China's manufacturing industry.

There are many types of modern ships, which can be classified according to hull material, sailing area, power plant, propulsion mode, sailing state, purpose and so on. Among them, the best way to describe the characteristics of the ship is to classify the ship according to its purpose.

2. Industrial chain analysis

Steel, non-ferrous metals, composite materials and Marine supporting equipment are important raw materials in ship production, and any change in these raw materials will affect the production quality and cost of the ship. Understanding the output and price trend of steel, non-ferrous metals and composite materials will help control the cost of the shipbuilding industry, and understand the technical research and development of Marine supporting equipment, which is conducive to the development of new products for ships.

Ships are widely used in shipping, national defense military industry, Marine engineering equipment and other industries, is an important supporting product of shipping, national defense military industry, Marine engineering equipment and other industries, and its product performance must meet the needs of these industries. The development of the shipbuilding industry depends on the pull of the downstream industry, but also restricts the development of these industries.

Industry development history: The initial establishment of a modern high-level ship industry system

The rise of the world's great powers has all started with shipbuilding and mastering the sea. As a symbol of the national industrial level, the shipbuilding industry has a high degree of industrial expansion, and has the reputation of "the crown of comprehensive industry".

Looking back on the development process of more than 150 years since modern times, China's shipbuilding industry has experienced the main stages of starting from ruins, opening up to the outside world, crossing the world, continuing to open up, from the numerous holes to regain vitality, from a hundred industries to be reborn, witnessing the rise and fall of The Times, and engraved the eternity of industrial rejuvenation. At present, China has entered the ranks of the world's shipbuilding powers, the international competitiveness has reached the world-class level, the basic formation of the modern ship science and technology innovation system, the initial establishment of a modern high-level ship industry system.

Industry policy background: Shipbuilding industry to green and intelligent transformation and upgrading

According to the 14th Five-Year Plan, the transformation and upgrading of green and intelligent manufacturing in the shipping industry will bring new development opportunities for some small and niche ship types of new shipbuilding sectors, and China's overall shipbuilding market will show diversified development beyond the three main ship types. According to the prospective analysis, in the next five years, China's regional container ships, small and large LNG carriers and offshore wind power ship construction prospects will be good; The cruise sector has benefited from the increase in the number of tourists after the epidemic and the impact of the construction of cruise ports in China, and the medium and long term development prospects are bright.

At the same time, in order to achieve China's development goals of "carbon peak by 2030" and "carbon neutrality by 2060", the shipbuilding industry must vigorously promote the development of zero-carbon emission ships, and accelerate the cultivation of new domestic demand for low-carbon/zero-carbon emission ships, including liquefied natural gas (LNG) refueling stations, Marine hydrogen refueling stations, and high-power charging piles for ships into the scope of "new infrastructure". Provide support policies in terms of capital investment, operation and maintenance to ensure that infrastructure development is synchronized with low carbon/zero carbon emission ship R&D and operation plans; Formulate policies to support industrial projects such as the "Green Yangtze River" and the "Green Pearl River", aiming at higher greenhouse gas emission reduction requirements in the future; Support the dismantling and renewal of ocean-going, coastal and inland vessels with high energy consumption and high emissions through the establishment of industrial funds and financial subsidies; It will promote new power applications such as LNG fuel, lithium batteries, and fuel cells, and support ships in transforming oil and gas collection systems and shore power receiving facilities.

Industry development status

1. The three major indicators of China's shipbuilding increased steadily

In 2020, the country completed 38.53 million deadweight tons of shipbuilding, an increase of 4.9 percent year-on-year. Orders for new ships were 28.93 million DWT, down 0.5% year-on-year. By the end of December 2020, orders for hand-held vessels were 71.11 million deadweight tons, down 12.9% year-on-year.

From January to July 2021, the country completed 24.18 million deadweight tons of shipbuilding, an increase of 20.7%. To undertake new ship orders of 45.22 million deadweight tons, an increase of 223.2%. As of the end of July 2021, the national hand-held ship orders of 89.67 million deadweight tons, an increase of 18.6% over the same period last year, and an increase of 26.1% over the hand-held orders at the end of 2020.

2. In 2020, the output value of key monitoring ship manufacturing enterprises will reach 153 billion yuan

From 2014 to 2021, the China Shipbuilding Industry Association focused on monitoring the fluctuations of the total industrial output value of enterprises. From January to November 2020, 75 key monitoring enterprises in the shipping industry completed the total industrial output value of 341.1 billion yuan, down 0.9% year-on-year. Among them, the output value of ship manufacturing was 153 billion yuan, down 2.3% year-on-year; The output value of supporting vessels was 25.1 billion yuan, down 4.6% year-on-year; The output value of ship repair was 14.7 billion yuan, up 12.2% year on year.

From January to July 2021, 75 key monitoring ship enterprises completed the total industrial output value of 214 billion yuan, an increase of 15.1%. Among them, the output value of ship manufacturing was 93.1 billion yuan, an increase of 16.2%; The output value of supporting vessels was 17.4 billion yuan, an increase of 20% year-on-year; The output value of ship repair was 8.1 billion yuan, down 10.9% year-on-year.

3. Ship manufacturing enterprises have been greatly affected by the epidemic

Different from the growth trend of other businesses in the shipbuilding industry, from 2013 to 2020, the sales revenue of China's shipbuilding enterprises above designated size showed a fluctuating downward trend, and the shipbuilding industry, as a traditional manufacturing industry, continued to be depressed.

In 2020, the national shipbuilding industry enterprises above designated size achieved sales revenue of 436.24 billion yuan, an increase of 0.6%. Among them, the sales revenue of ship manufacturing enterprises was 302.98 billion yuan, down 13% year-on-year; The sales revenue of ship supporting enterprises was 49.49 billion yuan, up 2.4% year on year; The sales revenue of ship repair enterprises was 29.93 billion yuan, up 13.5% year on year; The sales revenue of ship conversion enterprises was 3.93 billion yuan, down 2.7% year-on-year; The sales revenue of ship dismantling enterprises was 5.43 billion yuan, down 31.1% year on year; The sales revenue of offshore equipment manufacturing enterprises was 43.96 billion yuan, an increase of 19.3%; The sales revenue of manufacturers of navigation AIDS and other floating devices was 520 million yuan, down 17.2% year-on-year.

4, export ship orders accounted for 88% of the proportion of hand-held orders

In 2020, 34.25 million deadweight tons of export vessels will be completed nationwide, up 2.1% year on year; Received export ship orders of 24.45 million DWT, down 9.3% year-on-year; At the end of December, orders for hand-held export vessels were 65.21 million DWT, down 13.3% year-on-year. Export ships accounted for 88.9%, 84.5% and 91.7% of the country's shipbuilding completions, new orders and hand-held orders, respectively.

From January to July 2021, the country completed 22.653 million deadweight tons of export ships, an increase of 22.4%; To undertake export ship orders of 40.312 million deadweight tons, an increase of 219.4%; By the end of July 2021, orders for hand-held export vessels were 79.177 million deadweight tons, up 13.7% year-on-year. Export ships accounted for 93.7%, 89.1% and 88.3% of the country's shipbuilding completions, new orders and hand-held orders, respectively.

Industry competition pattern

1. Regional competition: East China has strong shipbuilding strength

From the number of enterprises, as of August 18, 2021, the number of domestic shipbuilding related enterprises as many as 82,449, Most of them are mainly concentrated in Jiangsu (20,340), Shandong (10,156), Shanghai (8,440), Zhejiang (8,417), Guangdong (7,642), Liaoning (4,513), Fujian (4,249), Hubei (2,709) and other provinces/cities. The industrial concentration of the top eight provinces reached 80.61%(according to the number of enterprises).

From the perspective of development, the current competition pattern of China's shipbuilding industry is a "three-legged" pattern of central enterprises, local shipbuilding enterprises and private shipbuilding enterprises. The central enterprise is China State Shipbuilding Group Co., LTD., while the local shipbuilding enterprises and private shipbuilding enterprises are mainly distributed in the Yangtze River Delta and Pearl River Delta, such as Jianglong Shipbuilding, Yangtze River Shipbuilding, New Era shipbuilding, Golden Bay shipbuilding and so on.

From the perspective of the overall operation of the shipbuilding industry, according to the statistics of the "China Shipbuilding Industry Yearbook 2020" in 2019, the shipbuilding completion volume, new orders and hand-held orders in East China, Northeast China and South China occupy a considerable share of the country, among which Jiangsu Province, Shanghai, Liaoning Province, Zhejiang Province and Guangdong Province account for a relatively large number.

2, enterprise competition: the market concentration of the top ten enterprises continues to increase

In recent years, the market concentration of China's shipbuilding industry continues to increase. In 2020, the top 10 enterprises in shipbuilding completion volume accounted for 70.6% of the national total, the top 10 enterprises in new ship orders accounted for 74.2% of the national total, and the top 10 enterprises in hand-held ship orders accounted for 68% of the national total, and the trend of concentration of new orders to advantageous enterprises was obvious.

In 2020, the competitiveness of China's leading shipbuilding enterprises has been further improved, with 5, 6 and 6 enterprises entering the top 10 in the world in terms of shipbuilding completion volume, new orders received and hand-held orders, and China's shipbuilding completion volume and hand-held orders in the world's top 10 increased by 1 and 2 compared with 2019, respectively.

Among the 11 listed enterprises in the shipbuilding industry, 8 representative enterprises are selected and their business layout is sorted out as follows.

Industry development prospect forecast

Looking ahead, many countries around the world have started to vaccinate, the novel coronavirus epidemic will be gradually controlled, and the world economy and trade are expected to slowly return to normal. With the recovery of the international shipping industry and the oil and gas industry, shipowners' investment confidence has been boosted, and pent-up market demand may be released.

However, due to environmental protection policies, alternative fuels and other reasons, the future development of the Marine market is still more uncertain. Based on the development of the global shipbuilding industry, the age of each ship type, the wait-and-see attitude of shipowners towards LNG powered ships with disadvantages, and the historical data of the three major indicators of shipbuilding in China, the prospective analysis believes that the completion of shipbuilding in China is expected to reach 39 million DWT in 2021, and the number of new orders is expected to increase to 55 million DWT. As a result, hand-held orders will further increase to 87.11 million deadweight tons;

In 2021-2026, China's shipbuilding manufacturing capacity is expected to be basically the same as that in 2020, the volume of new orders fluctuates, the volume of shipbuilding completed will be flexibly adjusted according to the volume of new orders received, and the hand-held order volume is calculated according to the annual volume of new orders received and the volume of shipbuilding completed. It is expected that in 2026, the absolutely environmentally friendly alternative fuel power technology still cannot be applied in ships. New orders will fall to 28 million DWT.