Issuing agency: China Association of the National Shipbuilding Industry
Column: run analysis
source: https://www.cansi.org.cn/cms/document/14750.html
The outbreak of the COVID-19 epidemic in 2020 has had a major impact on the normal social and economic operations of various countries, and has also brought an unprecedented impact to my country's shipbuilding industry. In accordance with the deployment requirements of the Party Central Committee and the State Council on coordinating the promotion of epidemic prevention and control and economic and social development, shipbuilding industry enterprises have actively promoted the resumption of work and production, and strived to overcome the adverse effects of the epidemic. In the first half of the year, the economic operation of the industry remained stable, with a slight increase in the number of new ship orders and a narrowing of the decline in shipbuilding completions. The international market share of the three major indicators continues to lead, but the industry's main economic indicators have fallen sharply, and problems such as "difficulty in delivering ships", "difficulty in receiving orders" and "difficulty in making profits" have become more prominent. The shipbuilding industry faces huge challenges in maintaining stable and healthy development.
In the first half of the year, the country's shipbuilding completion was 17.58 million deadweight tons, a year-on-year decrease of 10.6%, which was 10 percentage points narrower than the decline in May. New ship orders were 12.47 million deadweight tons, a year-on-year increase of 3.4%. At the end of June, the number of ship orders in hand was 76.54 million deadweight tons, a year-on-year decrease of 6.3%. Export ships accounted for the national shipbuilding completions and new orders respectively. 93.6%, 92.0% and 92.0% of the order volume on hand.
In the first half of the year, there were 1,020 shipbuilding industry enterprises above designated size in the country, with main business income of 197.25 billion yuan, a year-on-year increase of 1.9%. Among them, shipbuilding companies were 136.83 billion yuan, a year-on-year decrease of 2.6%; ship supporting equipment manufacturing companies were 24.18 billion yuan, a year-on-year increase of 11.3%; ship repair companies were 14.15 billion yuan, a year-on-year increase of 32.5%; and ship dismantling companies were 2.74 billion yuan. billion yuan, a year-on-year decrease of 28%; offshore engineering equipment manufacturing enterprises were 17.14 billion yuan, a year-on-year increase of 18%.
In the first half of the year, shipbuilding industry enterprises above designated size achieved a total profit of 3.4 billion yuan, a year-on-year decrease of 34.8%. Among them, ship manufacturing enterprises 1.83 billion yuan, a year-on-year decrease of 61.2%; ship supporting equipment manufacturing enterprises 1.01 billion yuan, a year-on-year increase of 29.2%; ship repair enterprises 680 million yuan, a year-on-year increase of 111.9%; ship dismantling enterprises 40 million yuan, A year-on-year decrease of 83%; offshore engineering equipment manufacturing companies lost 300 million yuan.
From January to May, my country's ship export value was US$8.5 billion, down 11.8% year-on-year. Among exported ship products, bulk carriers, oil tankers and container ships dominated, with a total export value of US$3.89 billion, accounting for 45.8% of total exports. Ship products were exported to 195 countries and regions, mainly in Asia. The value of my country's ship exports to Asia, Europe, and Africa was US$5.05 billion respectively. 1.25 billion US dollars and 750 million US dollars.
In the first half of the year, shipping companies coordinated and promoted normalized epidemic prevention and control and production and operation, and took multiple measures to deal with the difficulties and blockages in resuming work and production. As of the end of April, the shipping industry's production rate had reached 98%, and the production order had basically returned to normal. Shipping companies worked hard to overcome the difficulty of poor flow of foreign personnel, using digital means to flexibly carry out "cloud contracting", "cloud delivery", "cloud release" and other methods to fully explore the market, ensure ship delivery, and compete for orders, and achieved good results. China State Shipbuilding Corporation and Qatar Petroleum Company jointly signed a liquefied natural gas (LNG) ship construction project agreement through "cloud signing" in Beijing, Shanghai and Doha, Qatar, with a total order value of more than 20 billion yuan; Jiangsu Yangzijiang Shipbuilding, New Dayang Shipbuilding, Jinling Shipyard, Dalian COSCO Shipping Kawasaki, Qingdao Bei Shipbuilding Heavy Industry and other shipyards have achieved "cloud delivery" of completed ships through online video connections; the world's largest marine dual-fuel low-speed engine WinGD X92DF built by Shanghai CSSC Mitsui Shipbuilding Diesel Engine Co., Ltd. has been "cloud-released" to the world through video connections in Beijing, Shanghai, Marseille, Paris and Winterthur. Wuhan Marine Engineering is actively fighting on the front line of the fight against the epidemic, and is promoting the resumption of work and production in an orderly manner. As of the end of June, a total of 75 sets of marine power electromechanical equipment had been shipped and shipped, basically meeting the urgent needs of key shipbuilding companies.
In the first half of the year, my country's shipbuilding companies worked hard to overcome the impact of the COVID-19 epidemic on the industry, adhered to the principle of unchanged tasks and undiminished goals, and raced against time to refuel and work hard to recover the losses caused by the epidemic. Despite the overall downturn in the global shipbuilding market, my country's international market share maintained its leading position. The global market share of shipbuilding completions, new orders and orders in hand was 37.2% in terms of deadweight tonnage. 67.5% and 48.2%; industry concentration has further improved, with the top 10 companies accounting for 78.6% of the country's total shipbuilding completions, an increase of 9.9 percentage points from 2019. There is an obvious trend of new orders being concentrated in advantageous companies, with the top 10 companies accounting for 80.0% of the country's total, an increase of 5.2 percentage points from 2019. A total of 8 companies have entered the top 10 in the world in terms of new orders.
In the first half of the year, during the difficult period of the COVID-19 outbreak, domestic financial institutions effectively supported the resumption of work and production of shipbuilding companies by quickly issuing letters of guarantee, increasing credit support, reducing financing costs, and signing construction contracts, injecting strong impetus into stabilizing the development of my country's shipbuilding industry and boosting the confidence of shipbuilding companies. During the epidemic, the Export-Import Bank of China, the China Development Bank, etc., did not withdraw loans from shipping companies, continued to lend, did not press loans, and strengthened the docking of key enterprises. Speed up the issuance of letters of guarantee and loan issuance. Financial leasing institutions such as China National Bank of China Financial Leasing Co., Ltd., Bank of Communications Financial Leasing Co., Ltd., CMB Financial Leasing Co., Ltd., and Shanghai Pudong Financial Leasing Co., Ltd. placed orders for approximately 4 million deadweight tons from domestic shipyards in the first half of the year, accounting for 32% of all orders.
China State Shipbuilding Corporation has solidly promoted cost engineering, focusing on the procurement costs of shipping and supporting enterprises, outsourcing and labor costs, and strengthening the construction of various types of unit cost control and cost management systems. China Merchants Industry Group has included resource coordination in the key scope of the "Quality and Efficiency Improvement Project", through internal allocation of idle equipment, reducing investment in fixed assets, leasing and selling some equipment externally, revitalizing existing assets, and increasing cash income. COSCO Shipping Heavy Industry Co., Ltd. continues to promote its affiliated companies to carry out benchmarking learning from Nantong Kawasaki. Yangzhou COSCO Shipping Heavy Industry has shortened the shipbuilding cycle by an average of 20 days through improved management and technological transformation. Shanghai Waigaoqiao Shipbuilding has completed 5 items of design cost improvement projects including optimization of the double-bottom structure form of large bulk carriers/optimization of the strong frame opening form of hopper tanks, and loading, with a total weight reduction of 1,085 tons per ship.
In the first half of the year, state-owned enterprises actively responded to the new challenges of the epidemic and focused on the new national energy security strategy to promote in-depth cooperation between the upstream and downstream of the energy trade, transportation, and equipment manufacturing industry chain. China State Shipbuilding Corporation signed orders for three 174,000-cubic-meter liquefied natural gas (LNG) ships and two 307,000-dwt new-generation energy-saving and environmentally friendly very large crude carriers (VLCC) with China Ocean Shipping Group Co., Ltd. and China Merchants Energy Shipping Co., Ltd. respectively. COSCO Shipping Specialty Transport Co., Ltd. signed an order for 8 pulp carriers with Dalian COSCO Shipping Heavy Industry Co., Ltd. Shipping companies actively responded to the call to accelerate the new development pattern of domestic and international dual-cycle mutual promotion. In the face of a sharp decline in international demand, they deeply tapped the needs of domestic market customers and vigorously developed the domestic trade market. New Dayang Shipbuilding Co., Ltd., Jiangsu New Yangzi Shipbuilding Co., Ltd., Zhejiang Xinzhou Shipbuilding Co., Ltd. and other shipyards have signed orders with domestic shipowners for a number of river-sea direct bulk carriers and green, environmentally friendly and energy-saving feeder container ships.
In the first half of the year, due to the impact of the global epidemic and the expectation of economic downturn, the investment psychology of shipowners was seriously affected in the short term. The international shipbuilding market was filled with pessimism, and new ship transactions and inquiries decreased significantly. my country's new ship orders were less than 13 million deadweight tons, especially since the second quarter, showing a monthly downward trend. The number of orders held by my country's shipbuilding companies continued to decline, hitting a new low since the financial crisis. Production guarantee coefficient of shipbuilding companies (number of orders held/average of completions in the past three years) It is about 2.19 years. However, due to the generally low completion volume of shipyards in recent years, in fact, the production guarantee coefficient of most shipbuilding companies is less than 2 years, and the production task arrangement can only be maintained until 2021 and 2022. The vacancy rate of slipways (docks) has increased significantly. Some shipbuilding companies have a serious shortage of ships to start construction, and enterprises face severe challenges in continuous production.
In the first half of the year, as the domestic epidemic took the lead to be effectively controlled and the foreign epidemic continued to spread, domestic shipbuilding and repairing companies reported that due to restrictions on the entry of foreign shipowners, crews, and service engineers, some ship trials and ship deliveries were forced to stop, which directly affected the delivery of export ships and the repair of foreign ships. According to preliminary statistics, the number of foreign personnel that major shipbuilding and repairing companies urgently need to enter in the near future involves more than 1,400 people from 48 countries (regions). Although this issue has attracted national attention and issued relevant regulations, according to the situation in the past three months, many difficulties are still faced in actual implementation. Despite the coordination of multiple parties and the active efforts of enterprises, the progress is still very slow, and the proportion of foreigners who have obtained entry visas is very low. At the same time, affected by the epidemic prevention and control in various countries, foreigners who have obtained visas are also unable to come to China on time due to insufficient international flights. The difficulty of entry for foreigners has become the biggest obstacle to the stable development of the shipping industry.
On the one hand, the demand for new ships has dropped significantly, and new ship prices have continued to fall. In recent years, Clarkson's new ship price index has been at a historical low. Affected by the epidemic, the new ship price index at the end of June dropped by 3 percentage points compared with the beginning of the year. On the other hand, the project delays and poor logistics and transportation caused by the epidemic outbreak have caused high raw material prices, and the procurement of epidemic prevention materials has further increased additional costs for enterprises. In addition, many places in southern my country have suffered from waterlogging, flash floods and other disasters caused by heavy rainfall, which has given Jiangxi, The normal production and operation of shipbuilding companies along the rivers in Anhui, Hubei, Hunan and other areas caused serious losses. Statistics show that in the first half of the year, shipbuilding industry companies above designated size achieved a total profit of 3.4 billion yuan, a year-on-year decrease of 34.8%. Although the decline has narrowed compared with the beginning of the year, the problem of profitability of shipbuilding companies has become more prominent.
Affected by the continued deterioration of the overseas epidemic, the global shipbuilding industry's material supply, technical cooperation, business exchanges and other activities have been severely restricted. Some international supporting equipment and parts are facing shutdowns, production suspensions or inability to be supplied in time due to the epidemic, causing the production progress of ships under construction to be seriously affected. In addition, the international shipping market, especially the container ship market, continues to be sluggish, and shipowners' cash flow and financing capabilities have been affected to varying degrees. Coupled with the sharp reduction in international freight volume, some shipowners have declined in their willingness to accept ships. Submit an application to the shipyard for the number of days of force majeure to pick up the ship, and clearly propose a delay in picking up the ship. As of the end of June, according to sampling statistics, the delayed delivery rate of 50 key monitoring companies was about 20%, and the problem of ship delivery difficulties for shipping companies has become prominent.
The COVID-19 epidemic that broke out in early 2020 has made the global new shipbuilding market, which was already in a downward cycle, even worse. Major research institutions continue to lower their expectations for the market equilibrium point. The International Monetary Fund (IMF) recently predicted that global economic growth will drop to -4.9% this year, and Clarkson predicts that global maritime trade will shrink by more than 5%. Before the COVID-19 epidemic is effectively controlled globally, affected by the overall environment, The new shipbuilding market is unlikely to recover. It is expected that the global new ship transaction volume in 2020 will be 3,000 to 40 million deadweight tons; the shipbuilding completion volume will be around 95 million deadweight tons; and the number of orders held by the end of the year will drop to the level of 120 million deadweight tons.
In the first half of the year, although orders from domestic shipowners strongly supported the stability of my country's new ship orders, my country's shipbuilding industry is an export-oriented industry, and orders from international shipowners, especially orders from mainstream shipowners, accounted for more than 60% of my country's handheld ship orders. At present, the COVID-19 epidemic has disrupted the original world trade pattern, the uncertainty of global economic growth has increased significantly, and shipowners' investment confidence is seriously insufficient. It is still difficult to see significant changes in the second half of the year. It is expected that my country will receive about 22 new orders throughout the year. million deadweight tons, the shipbuilding completion volume is about 35 million deadweight tons, and the number of orders on hand at the end of the year dropped to about 70 million deadweight tons.
From the perspective of the ship type market, my country's epidemic prevention and control has achieved remarkable results, the economic recovery continues to improve, domestic demand for energy, minerals, grain and other imports has steadily rebounded, and there are still opportunities to be found in new shipbuilding markets such as bulk carriers, oil tankers, and gas ships. At the same time, the global spread of the new crown epidemic is also accelerating the transformation of traditional trade models. Intelligent shipping, regional trade, and domestic logistics will become new highlights. Smart ships, feeder ships, The development of inland river ships has ushered in new opportunities. However, affected by the overall global trade situation, the contradiction between supply and demand for shipbuilding is difficult to improve, and the living environment of shipbuilding enterprises may further deteriorate.
Since the outbreak, in order to reduce the impact of the epidemic on the real economy, the country has intensively introduced a variety of preferential tax and fee support policies for epidemic prevention and control, including supporting corporate financing, tax exemptions, and refunds of social security. Local governments have also introduced a series of supporting policies during the epidemic. It is recommended that relevant departments ensure that the state’s preferential tax and fee policies to support epidemic prevention and control are implemented in place. Industry associations and other institutions should increase publicity efforts so that companies in the shipping industry fully understand the support policies.
It is recommended that domestic financial institutions provide extension support to high-quality shipbuilding companies that have difficulties in repaying credit due due to the epidemic. Ensure that working capital loans required for ships under construction and valid contracts of shipbuilding companies are received on time, and issue payment and repayment guarantees in a timely manner. Financial institutions are encouraged to help companies tide over difficulties by issuing special loans to support the shipbuilding industry, lowering financing rates, adjusting repayment terms, etc.
It is recommended that under the guidance of the competent government departments, industry organizations should take the lead in establishing an information communication mechanism on the entry needs of foreigners, so as to provide good services for government departments to solve the problem of entry difficulties for foreigners. At the same time, it is recommended that relevant government departments speed up the entry and exit approval and customs clearance of shipyard operators, so as to create good conditions for shipyards to negotiate new orders, ship construction and smooth trial voyage delivery.
It is recommended that relevant national departments focus on building a new development pattern in which domestic and international dual cycles promote each other, promote the upgrading of inland river and coastal ships; promote the development and application of new marine engineering equipment such as deep sea farming equipment and offshore wind power installation ships; promote the coordinated development of domestic shipping, energy, bulk commodity companies and shipping companies, cooperate around new energy security strategies, and take multiple measures to ensure the healthy development of the industry chain of the shipbuilding industry.