Global orders for new ships increased by nearly 300%, and the shipbuilding market cycle has turned around.

On September 15, the China Shipbuilding Industry Association announced the economic operation of the shipbuilding industry from January to August 2021, and the three major shipbuilding indicators all increased year-on-year. In particular, in the first eight months, domestic shipyards received 49.11 million DWT orders for new ships, an increase of 227.2%; Shipyards worldwide took on 94.74 million DWT, up 298.1% year on year.

The shipbuilding market is closely related to the shipping market, in fact, both markets have been silent for more than 10 years after 2008. Since the epidemic broke the balance of the global supply chain, since the middle of last year, international freight rates have continued to rise, and shipowners represented by CoSCO Sea Control have earned a lot of money, and COsco Sea Control made a profit of 37.1 billion yuan in the first half of 2021. As the aforementioned data shows, shiboatowners' enthusiasm for new shipbuilding is being ignited, and whether the shipbuilding market can follow up and usher in a cycle reversal has attracted much attention.

Due to the long shipbuilding cycle, new orders have not yet been reflected in the performance of the ship enterprises, and due to the rising steel prices, exchange rate fluctuations and rising labor costs and other factors, the pressure of the ship enterprises is not small. At present, the industry's outlook for the shipbuilding market is unclear, because new ship orders are more from shipowners to cope with the new environmental regulations brought about by the renewal of the demand, rather than the need for fleet expansion; But what is certain is that attention to the shipbuilding market is increasing.

New shipbuilding orders increased by nearly 300% during the year

Cosco Sea Control disclosed a new ship contract on the evening of September 2, the holding subsidiary Orient Overseas and its subsidiaries will respectively order 5 container ships from Nantong Cosco Kawasaki and Dalian Cosco Kawasaki, the agreement is a single ship capacity of 16,000 TEU, the price of each ship is 157.58 million US dollars, the total price of these 10 ships is 1,575.8 million US dollars. About 10.19 billion yuan.

Due to the long construction period of the ship and considering the shipyard schedule and other factors, the above order will not be delivered until at least three years later. Among them, the expected delivery time of Nantong Cosco Kawasaki is between the first quarter of 2025 and the fourth quarter of 2025, and the expected delivery time of Dalian Cosco Kawasaki is between the fourth quarter of 2024 and the fourth quarter of 2025.

Cosco said that the transaction will increase the number of its own vessels and increase the average container capacity per vessel of OOCL and its subsidiaries, and under economies of scale, the cost per container will be reduced with the increase in container capacity per vessel, thus enhancing the operating cost competitiveness of OOCL and its subsidiaries.

Cosco Sea Control is the star company in the current A-share market. Since the middle of last year, the company's stock price has risen nearly 10 times, behind which is the rapid growth of the company's performance. In 2020, CoSCO Sea Control's net profit reached 9.927 billion yuan, an increase of 46.76% over the same period last year.

The booming shipping market and rising freight rates have allowed shipowners to "start business for three years" and plan for capacity expansion. The reporter noted that in March last year, October and July this year, COSCO Sea Control also signed three other shipbuilding agreements, including 12 23,000 TEU container ships, 6 14,092TEU container ships, and 4 16,180TEU container ships. Currently, COsco holds 32 orders for new ships with a total cost of 32.68 billion yuan.

In addition, recently, Evergreen Shipping ordered 24 feeder container ships of three sizes from CSSC Huangpu Wenchong, worth about 1.045 billion US dollars; CSSC Chengxi won the construction order of 3 88,800 tons bulk carriers from Turkish CINER Company; New Ocean Shipbuilding also signed four new 63,000 ton bulk carriers.

Not long ago, Seaspan, the world's largest independent container ship owner, confirmed the execution of alternative orders, spending 3.4 billion yuan to order 5 additional 7,000TEU dual-fuel container ships in Yangzijiang Ship Group. With this order, Yangzijiang Shipbuilding Group this year to 118 orders, a total value of $7.21 billion.

With the announcement of the semi-annual report, the reporter also combed through the A-share major shipbuilding enterprises in the first half of this year to receive orders and complete the situation. Among them, Chinese ships undertook 93 civilian ship orders / 9,644,400 DWT, and completed delivery of 36 civilian ships / 3,274,200 DWT, accounting for 25.22% and 15.65% of the total undertaken and completed in the first half of the country, respectively. According to the company's statement, the current capacity utilization rate is relatively stable, and there is room for improvement; Orders in July and August generally continued to be active in the first half of the year.