Orders surge for Chinese shipyards

A worker at a shipyard in Lianyungang, Jiangsu province, is busy with a fishing ship. [Photo provided to China Daily]

Chinese shipbuilders are seeing a surprise surge in new orders despite the sluggish global demand.

State-owned AVIC International Ship Development (China) Co Ltd received orders this month for four ro-pax ferries from Stena RoRo, a subsidiary of the Swedish shipowner Stena AB.

It is the first time a Chinese shipyard has won a contract to build ro-pax ferries for a Western owner.

The multi-billion-yuan deal came on April 5.

Three days later, the country's No 1 private shipbuilder Yangzijiang Shipbuilding Holdings Ltd inked a $510 million deal with ICBC Leasing, a shipowner under Industrial and Commercial Bank of China Ltd, to build six large iron ore carriers.

Chinese shipbuilders received 7.42 million dead weight tons of new orders in the first quarter of this year, representing more than 80 percent of the new orders worldwide, according to industry watchdog, the Ministry of Industry and Information Technology. The Chinese builders only controlled less than a third of the global new orders a year ago.

The stabilizing global economy, recovering commodity market and the advance of Baltic Dry Index helped boost ship demands. Japan and South Korea are among the major competitors for Chinese shipyards.

Stronger international presence has sent up shares of local shipyards.

Stocks of China State Shipbuilding Corp, one of the biggest shipbuilders in China, closed at 25.58 yuan ($3.95) on Friday, comparing with the week low of 24.45 yuan.

Shares of Zhejiang-based Asian Star Anchor Chain Co Ltd climbed 0.68 percent to close at 10.36 yuan.

"Shipbuilders delivered more ships in 2015 than a year earlier. Delivery number of super-large carriers saw an obvious increase while demand for bulk cargo ships went flat," according to a report from Shanghai Brilliance Credit Rating and Investors Service Co Ltd. "Chinese makers are heavily relaying on bulk cargo ships."

Industry researchers said the future for small shipyards remain gloomy despite the recent order pickup.

The China Association of the National Shipbuilding Industry said Chinese shipbuilding industry shrank in the first two months in terms of tonnage delivered, under construction and new orders.

Zhang Feng, spokesman of the MIIT, said in an earlier interview that further adjustments to the industrial structure are needed in the shipbuilding sector.

"We are more interested in quality than quantity in the industries that are suffering from overcapacity," said Zhang.

Zhao Zhongxiu, vice-president of the University of International Business and Economics, said the increase in overseas orders indicates overseas shipowners are preparing fleets for economic recovery.

"Chinese shipbuilders are offering a considerably lower price for orders, so for shipowners, it is a good chance to use less capital purchasing a larger fleet," said Zhao.

Zhong Nan contributed to this story.