Japan's shipbuilding industry turning corner as orders double
Date: Thursday, January 18, 2018
Source: Nikkei Asian Review
Buoyancy appears to be returning to Japan's shipbuilders as order volumes for mainstay merchant vessels rose 150% in 2017, according to data released Wednesday.
Out of the rut
Orders in 2017 came to 195 vessels totaling 9.45 million gross tons of capacity, according to statistics from the Japan Ship Exporters' Association. That is less than the annual output capacity of 12 million GT to 13 million GT across Japan's mainstay shipyards, but still more than double 2016's historic low of 3.71 million GT.
Bulk carriers comprised 156 of those vessels, or about 80%. A glut of shipyards in China has created excess shipping capacity, dragging down tonnage values. But progress has been made in trimming that fat.
"Tonnage values for bulk carriers bottomed out in the second half of 2017, and are returning to profit-generating levels," said the head of a specialist in the field.
Mitsui Engineering's ship orders for the six months through September plunged 35% on the year to 19.9 billion yen ($179 million). But "deals to build new ships are increasing at present," says executive officer Toshiro Miyake. Order values for the year through March are seen growing 50% year-on-year to 100 billion yen.
A key Mitsui Engineering shipyard in Japan's southern prefecture of Okayama is operating under capacity. But with orders to build at least 15 bulk freighters by 2019, the company aims to respond by lifting operating ratios at its plants.
In containerships, by contrast, Japan took orders for just 12 vessels in 2017. Major shipbuilders in China and South Korea took bargain prices in many cases for large ships bearing 10,000 to 20,000 container units, seeking to lock in work.
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