The report titled “China Shipbuilding Industry Outlook to 2020 – Concentration on Gas Carriers and Cruise Ships to Stimulate China Shipbuilding Industry” provides a comprehensive analysis of China Shipbuilding Industry. The report focuses on the new shipbuilding and ship-repair industry in China and covers market size and segmentation of overall China Shipbuilding industry by type of ships delivered, by regional manufacturing clusters, by ownership, by customer base, by new orders and repairs. The report covers the market share and detailed company profile of leading players and the failed players. The potential and future outlook for China Shipbuilding Industry has also been discussed in the publication. The report provides detailed analysis of major players, their strategies, SWOT Analysis, Trends & Developments and major issues and challenges with the China Shipbuilding Industry. The report also serves as a benchmark for existing players and every new player who wish to capitalize the market potential and investors who are looking forward to venture into the China Shipbuilding Industry.
China Shipbuilding Industry
Most of the developing world is suffering from an economic slowdown a prolonged weakness in the commodity prices is expected over the next decade. Fluctuations in the commodity prices have a detrimental impact on the Shipbuilding Industry in China. The expectation of low commodity prices means that there will be a readjusting of the current and future fleet of the shipping companies. This directly affects the orders for the new ships that the shipping companies place with the shipbuilders. In 2015, China’s Shipbuilding Industry accounted for ~% of the global shipbuilding industry’s revenue. China’s Shipbuilding Industry was valued at USD ~ billion in 2015 and the value has been declining since 2010 exhibiting a CAGR of ~% from 2010-2015. A mere ~ new order was placed at the Chinese shipyards in 2015. The new orders in China shipbuilding industry witnessed a CAGR of ~% from 2010-2015. This has been in line with the declining orders in the global shipbuilding industry. The major bright spot for the shipbuilding industry is the demand for energy shipping, especially LPG/LNG shipping as more nations are moving away from considering crude oil as the only source of fuel. This will increase the demand for LPG/LNG carriers and the shipbuilding companies in China should focus more on the manufacturing of such carriers instead of focusing on the declining bulk-carrier manufacturing industry.
China Shipbuilding Market Segments
Bulk carriers have accounted for the major share of the shipbuilding activities in China attributable to the commodity boom in the past, for instance, coal and iron ore The government is trying to boost the cruise ship manufacturing in China by tying-up with the leading foreign players for instance, Fincantieri. There has been a transition in the shipbuilding industry in China with the production of dry cargo coming down significantly.
China Ship-repair Industry
China is considered as a low cost ship-repair market in the world. This is mainly because of the lower administrative costs and wages in China. The highest price registered in China is ~% cheaper than the lowest price registered in South Korea. On an average it takes around USD ~ for a general dry bulk cargo ship to get repaired in China whereas the same ship is repaired at more than USD ~ in Japan mainly because of the higher steel prices in Japan. This clearly highlights that ship repair industry in China has the potential to compensate the downturn in the new shipbuilding market.
Competition
The shipbuilding industry in China is dominated by the state-owned companies: China Shipbuilding Industry Corporation (CSIC), China State Shipbuilding Corporation (CSSC), CIMC Raffles, COSCO and China Merchants Industry Holdings Co. Ltd. (CMIH). Out of these five forces, CSIC holds a major share of ~% in 2015 followed by CSSC. Apart from these, some private players are also operating in the China shipbuilding market. But environment for private companies in the China shipbuilding industry has never been as supportive and has become worse in the recent times. Private players captured a minimal ~% share in the total revenues in 2015.
Future Outlook
The future outlook for the Chinese shipbuilding industry is also contingent upon the investments in the infrastructure segment by the countries which are considered as untapped markets by the Chinese maritime analysts for instance, countries in central Africa and Latin America. If these countries do not have the necessary infrastructure required at the ports, the Chinese shipping industry will not have new orders from the owners of ships in such untapped market. The shipyards have to become more technologically advanced so as to attract the next generation of maritime professionals. China is already suffering from a huge industrial and infrastructural overcapacity, high public debts and slower economic growth which could again become a hurdle in the improvement of China Shipbuilding Industry.