Ship deliveries from China exceeded those from Japan in the first six months of the year for the first time. According to figures from Clarkson Research, China's share climbed to 23 percent in the first half, compared with Japan's 22 percent.
Clarkson's analysts said that 2009 would go down in the history of shipbuilding as a year of change. At the start of the year, the world's shipyards had an all-time orderbook high at 595 million DWT. It is, however, not clear how much will actually be built.
Clarkson's research showed that Japanese builders have adopted a different strategy to shipyards in Europe. Deploying so-called "improvement engineering", Japanese yards have reduced building costs of standard ships by building to a strict specification. Bulk carriers now represent two-thirds of Japan's orderbook.
By contrast, European yards have opted to build "hi-tech" ships such as cruise vessels, chemical tankers, LNG carriers and other specialised vessels including dredgers.
The shipbuilding race is now on between China and South Korea. In the second quarter, China's output hit a peak of 2.48 million compensated gross tonnes (CGT), more than percent ahead of Japan's 2.2 million CGT. But 2010 could see Chinese production reaching four million CGT per quarter, lagging not far behind South Korea's five million CGT.
Market sources point out that more new tonnage is being delayed than previously thought, though actual volumes are not clear. The volume of cancellations, which actually mean contract defaults, is also a closely guarded secret between shipyards and their customers. The key issue is the global trend in deliveries.
"During the last economic downturn in 2002, world shipbuilding deliveries averaged 4.5 million CGT per quarter. But currently, production is eleven million CGT per quarter, a 244 percent increase," said Clarkson in its latest weekly report.
However, some financiers are warning that the worst of the ship finance crisis is still to come. As much as half of the world's orderbook could as yet not be financed, some believe, leaving a strong possibility that there could be many more contract defaults to come.
"As much as 30 percent of the orderbook may be cancelled or defaulted upon," said one source.
Tracey Jia