The annual growth rate in Q1 2008 revenue Chinaâ? S ship hit a record 74th generation 04 per cent. Since decreases the number of ships and shipping Owners? Inability to pay shipping costs to remove many orders and growth rates started to decline. This is generally affected by the vessel industry.

 

From October 2008 until February 2009, 110 orders for the second 74 million DWT vessel is removed, while the two first months of 2009, canceled orders for 13 ships.

 

Most of them have canceled orders for long-term supply contracts, the two ships, six ships 118000 DWT 2009 393000 DWT 2010, and five ships, 153,000 DWT 2011th What are these contracts were some of the most dry bulk container. This situation is supported by the ship companies would also be seriously affected, and cases of delayed payments for advertising of canceled orders would occur normally.

 

In the early three months of 2009, the sales revenue achieved a year-on-year increase of 22. 12 percent to RMB 5. 459 billion while the cost increased by 39. 95 percent year on year to RMB 4. 584 billion as well. Thus, net profit slipped by 36. 3 percent to RMB 623 million and the rate of net assets gains declined by 3. 43 percent to 4. 92 percent. The increasing outputs and decreasing orders led to the oversupply of the industry.

 

The steel price index dropped to 95 points in middle April of 2009, even 5 percent lower than that of 15 years ago.

 

However, the decreasing steel price did not raise the profits of ship manufacturing enterprises. It was partly because steel, as the major raw material, should be purchased early. For example, steel used in Q1, 2009 were purchased in Q1, 2008, when the steel price was still high.

 

It could be implied that revenues of Q2, 2009 will show a slight fluctuation on the basis of revenues of Q1, 2009 while the declining steel price will contribute to the increasing revenues of ship manufacturing enterprises in Q3, 2009.

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Although the cost expenses are slipping, the ship prices and orders represent a downtrend. Ship outputs are increasing while orders remain decreasing. Major risks are that ship owners might breach the contract or ship factories and ship owners reset prices to make the losses suffered by both sides.

 

Lower labor costs allow Chinaâ? S ship repair industry in the most advantageous option for the international market. But the price began to repair the ship after October 2008, which also pulled down the ship repair industry profits fall.

 

As time goes by, the global financial crisis will affect more industries. Especially since the early 2009, risks and difficulties that ship enterprises are facing have showed an uptrend.

 

According to the â??Adjustment and Revitalization Plans of Ship Industryâ? issued in February 2009, government stated that new projects of expanding docks and berths would be suspended, that is to say, those redundant projects of low levels would be adjusted or kicked out of market.

 

Though severely affected by the global financial crisis, Chinaâ??s ship manufacturing also has some potential opportunities of investment.

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On April 30th, 2009, many shipbuilding representatives and maritime affairs officials from Norway and South China attended the seminar â??Developing Trend of Shipbuilding Industry in Futureâ? held by The Norwegian Consulate General in Guangzhou and Innovation Norway. Participants discussed the current state and prospect of shipbuilding industry in South China, as well as how Norway should use its maritime advantages to assist Guangzhou to be the base of global shipbuilding industry and ocean industry. Enterprises from Norway included DNV?17-Group?Wilhelmsen, Ulstein, Kongsberg, Rolls-Royce, MultiPlus Solution, etc.

 

Norway is leading in the concepts and technologies of ship design, manufacturing, environment protection and offshore oil and gas development. At present, many Norway enterprises have entered Shanghai and Dalian while some are active in South China. These businesses provide the equipment, technologies and services needed by Chinaâ??s shipbuilding industry.

 

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Article Source:China Sourcing Blog

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