In the third quarter of 2024, Chinese shipyards have sent out the good news of ships on schedule.
On August 11, China Shipbuilding Group's Jiangnan Shipyard No. 4 dock welcomed a 99,000 cubic meter ultra-large ethane ethylene carrier (hereinafter referred to as "VLEC") and a 7,800 car carrier (hereinafter referred to as "PCC") out of the dock at the same time; On August 23, the second ship of the 14,000 TEU liquefied natural gas (hereinafter referred to as "LNG") dual-fuel container ship series (H2786) built by Jiangnan Shipbuilding for Singapore Pacific Shipping successfully left dock 3; On September 5, the 114,000 ton Afra product tanker H1572 built by Waigaoqiao Shipbuilding for Thenamaris company also successfully completed its docking......
Docking refers to the completion of the construction of the ship into the water, is a key node in the entire shipbuilding process. Only by leaving the dock on time and smoothly can we ensure the smooth development of subsequent trials, completion and delivery of the ship. Therefore, this link in the shipbuilding industry is also commonly known as the "Ji Shui" ceremony, meaning that the ship smoothly and safely into the water.
After the ceremony began, the shipbuilders would stand on the shore, looking at the ship that they had designed the drawings, welded the iron sheets with their own hands, and personally participated in the construction of the ship. "Big test" is coming, people can not help but clench their fists, hoping that it can smoothly leave the ship berth, smooth water, and finally berth in the shipyard dock.
Their attitude on shore is no different from that of the Chinese people watching China's shipbuilding industry go out to sea.
Forty-six years ago, China's shipbuilding industry was like an "old ship" stuck in a dock, following a set of ship design and construction models different from Western standards, and basically deviating from the international market.
Forty-six years later, in 2024, China's shipbuilding industry has raced on the waves, maintaining the world's first shipbuilding completion volume, new orders, and hand-held orders for 14 consecutive years, with a market share of more than 50%. That is to say, for every two ships completed in the world, one is made in China.
Leaving is a small boat, returning is a giant ship, but the history of Chinese shipbuilding is not smooth sailing. The outbreak of the 2008 financial crisis caused the global economy to cool, the global shipbuilding industry fell into a downward cycle, China's shipbuilding industry has also been involved, a large number of shipyards faced bankruptcy and resource restructuring, from 2009 to 2016, the number of active shipyards in China has decreased by 226.
In 2024, as the world's largest shipbuilding country, China is also more closely involved in the international ship market. In the face of the new ship cycle, opportunities and risks are accompanied.
01
1981 International standards: The modern shipbuilding industry originated from the first industrial revolution in Europe, China Merchants Bank Research Institute research report pointed out that the industry is a typical capital, technology, labor-intensive manufacturing industry, therefore, its industrial transfer path in line with the industrial gradient transfer theory, that is, from the industrialization and labor cost of high gradient countries and regions to low gradient countries and regions.
At the end of the 19th century, Britain, which controlled global trade, produced more than 60% of the world's ships and owned more than 50% of the world's fleet, occupying the absolute dominance of the market.
In the middle of the 20th century, Japan, which completed the industrialization transformation through the Meiji Restoration, also began to emerge in the shipbuilding industry, and in the recovery of global trade after World War II, it became the new world's first with its industrial foundation and labor price advantage.
In the late 20th century, the Japanese shipbuilding industry was hit hard by the first oil crisis in 1973. At this time, Korea, with its government protection policy, financial support and cheap labor advantages, quickly seized the shipbuilding market at a low price, and took over the position of the world's largest shipbuilding country from Japan. Parallel to this international industrial transfer path is the modernization and market-oriented transformation of China's shipbuilding industry. At this time, no one can imagine that China, which has no modern shipbuilding industry, will become the next world shipbuilding champion.
Before 1978, China's shipbuilding industry was still in the stage of unified management under the planned economy system, and it was under the jurisdiction of the national defense industry, mainly relying on military orders. However, due to the downturn in the domestic ship market at that time, the shipbuilding units that had long been accustomed to "eating imperial grain" were faced with the situation of "no rice under the pot", and the local shipyards sent letters to Beijing "to task and order", and received a reply that "they feed themselves".
At that time, the Sixth Ministry of Machinery Industry of the People's Republic of China (hereinafter referred to as the "six machinery Ministry") Minister Chai Shufan clearly conveyed at the national shipbuilding industry leading cadres meeting: first, each unit should go to "find the rice cooker", and the second is that Chinese ships should enter the international market. This instruction was later graphically referred to as "pushing the ship into the sea", meaning that China's shipbuilding industry would begin to turn the ship around and face the broad market.
Since then, China's shipbuilding industry system began to transform, from the military supplies production under the planned economy system to the civilian-oriented industry, with the international market as the target.
The vision is very good, but China's shipbuilding is facing a severe dilemma of orders, production capacity and technology "from 0 to 1".
No international orders? After repeated discussions, the six aircraft department decided to "first strive for Hong Kong shipowners to book ships in China" as a breakthrough in the international market, and finally, they regarded the Bao Brothers, patriots who are important in the Hong Kong shipping industry, as the preferred shipowners.
After contact and negotiation, the Bao brothers and the six machinery Department hit it off and changed the 27,000 tons of bulk carriers originally planned to be built in Japan to be built in China, sending the first order for China's shipbuilding industry.
The corresponding requirements are that the shipbuilding must meet the British Lloyd's Register of Shipping standards, 18 months to deliver the ship, the preferential period of 1 month, a fine of 4500 US dollars per day of tow, 150 days overdue, the shipowner can abandon the ship, if the technical requirements are not met, the shipowner can request rework and compensation.
The British Lloyd's Register of Shipping standard required by the order is a completely different system from the Soviet ship design and construction standards, from the main engine, cabin, generator, etc. of the whole ship design to the wall lights and hooks of the seafarer's room, which have clear technical requirements - meaning that China's shipbuilding industry needs to "re-learn" how to build ships.
Under the time pressure of 18 months, the team of Dalian Shipyard compared with another set of new technical system, listed more than 380 problems one by one, and then one by one to overcome and digest, the limited technology will take the initiative to learn from foreign shipping enterprises to innovate, and the skills can not be carried out in the whole factory training, step by step to narrow the gap with international standards. Finally in 1981, the "Great Wall" in the difficult process of exploration, to achieve 18 months on time delivery, and almost "zero error" through the acceptance. It was also from this ship that China proved its shipbuilding capabilities to the international market, and orders came one after another.
At the same time, the market-oriented transformation of the shipbuilding industry has also led to institutional reform, and the establishment of China State Shipbuilding Industry Corporation is the first step.
In the second year of the delivery of the "Great Wall", the sixth machinery department was abolished, and all its directly affiliated units were divided into the newly established China State Shipbuilding Industry Corporation, and China's shipbuilding industry was formally restructured from an administrative system unit to an independent economic entity, which means that the original "military-oriented" policy of the sixth machinery Department was transformed into a "military-civilian combination, military products priority" orientation.
Since then, China's shipbuilding industry has realized modernization and transformation faster, and its technology, standards and systems have begun to meet international standards. By 1995, China State Shipbuilding Corporation had undertaken a total of 2.46 million tons of ship orders and completed 1.184 million tons. China's shipbuilding industry surpassed Germany for the first time and became the third largest shipbuilding country in the world.
Institutional reform still needs to be deepened, in 1999, China State Shipbuilding Industry Corporation implemented a major restructuring, split into China State Shipbuilding Industry Corporation (hereinafter referred to as "CSSC") and China Shipbuilding Industry Corporation (hereinafter referred to as "CSSC") two independent enterprises for "north-south competition", breaking the traditional "one dominant" market pattern.
At the same time, local joint-venture shipyards are springing up. In the same year, Nantong COSCO Kawasaki Marine Engineering Co., LTD. (NACKS), a joint venture between China Ocean Shipping (Group) Corporation (COSCO) and Kawasaki Heavy Industries Co., LTD. (KHI), was officially opened in Nantong, Jiangsu Province. Yangzijiang Shipyard began to carry out shareholding reform, which started the process from a state-owned enterprise to a 100% privately held company.
02
In 2001, "WTO entry" : Chinese shipyards entered the world cycle and really detonated the upward cycle of China's shipbuilding, which was China's "WTO entry" in 2001.
After China's accession to the World Trade Organization (WTO), all industries in China began to enter the international economic cycle, and enterprises and individuals in the industrial chain were also incorporated into the entire world economic system as economic subjects and labor units. Not only has the commodity export trade doubled, the ship itself has also become the focus of exports.
Due to its ability to radiate the whole industrial chain to economic growth and labor employment, the shipbuilding industry is regarded as an important driver of China's economy and has become a pioneer in going to sea. A leader clearly emphasized in the instructions: "The development of ship manufacturing to stimulate economic growth and labor employment is very important, and visible, unlike some small commodities, so do not take this issue lightly."
The market pattern at that time was also conducive to the development of China's shipbuilding industry. On the demand side, global trade has created a large amount of shipping demand, superimposed ship decommissioning and large-scale replacement needs, and the global shipbuilding industry has entered a new upward cycle. There are also changes on the supply side. In the shipbuilding industry, bulk carriers, tankers and containers are known as the three traditional ship types, accounting for a total of about 86% of global shipping capacity. According to the size of the load size and the specific load type, it is divided into low value-added and high value-added ship types. High value-added ships rely on advanced technology, skills, processes, complex labor, creativity and other elements of design and construction, compared with the same tonnage or the same size of the ordinary ships often have a higher price.
At the beginning of the 21st century, rising labor costs continued to impact the market competitiveness of the Japanese shipbuilding industry, and the Korean shipbuilding industry, which occupies a dominant position in the global market, shifted to the development of medium and high-end positioning (such as very large containers, very large tanker VLCC, LNG and other high additional ship types), and the "low-end" field of the global market (standard bulk carriers, oil tankers, etc.) appeared market space.
At the same time, China's various capabilities are already in place - the modernization transformation at the end of the 20th century has enabled China's shipbuilding industry to have the production capacity to meet international standards and qualifications, the shipyard reform in 1999 before WTO accession has broken the traditional market pattern of a monopoly, and the low labor force has provided a solid foundation for the shipbuilding industry. China has become the best choice to undertake small and medium-sized, bulk carriers and other ship types.
The world shipbuilding cycle superimposed on the timing window resonance of China's accession to the WTO has completely detonated the upward cycle of China's shipbuilding industry.
In 2002, China's shipbuilding completed capacity (in deadweight tons) was 4.17 million tons, new orders were 6.56 million tons, and hand-held orders were 13.13 million tons, accounting for 6.6%, 12.4% and 11.4% of the international market share respectively. In the next five years, China's shipbuilding orders showed a fault-like growth, in 2006, the number of new orders exceeded 50 million tons, the next year in 2007, the value directly doubled to 107.52 million tons.
Founder Securities Research Institute research report pointed out that there were 79 active shipyards in China in 2000. In 2002, under the order tide from the sky, the equivalent of a shipyard can receive an average of 83,000 tons of shipbuilding orders, and the market is in short supply. Moreover, due to the long production cycle of ship construction and the need to occupy the ship berth, the capacity of large shipbuilding groups is limited, and a large number of orders are therefore spillover to the market.
According to a report by China Shipbuilding News in 2006, there were not a few shipbuilding projects with an investment scale of 100 million to 1 billion yuan at that time, and there were also many small shipyards with an investment scale of less than 100 million yuan. Between 2000 and 2008, the number of active yards grew from 79 to 414.
Under the stimulus of huge profit space, a large amount of capital enters the shipbuilding industry, but at the same time, it is mixed with speculative funds, resulting in the shipbuilding market. An article in the "Half Month Talk" disclosed that counting the "beach shipyards" that do not have qualifications and construction bases, the number of shipbuilding repair enterprises in the country can reach 2,000 to 3,000 in 2008.
03
In 2010, the scale of the world's first, to the high-end march experienced the upward cycle of optimism and expansion, China's shipbuilding industry for the first time really felt the rebound of the world cycle "fierce". After the outbreak of the financial crisis in 2008, the shipowners' capital chain was tightened, and the phenomenon of "delaying the construction period" and "abandoning ship" frequently appeared, resulting in the ship enterprises being affected and shut down.
From 2008 to 2023, the number of active shipyards in the world fell from 1,031 to 371, and the number of active shipyards in China also fell from 462 to 157, and the national capacity entered a long-term liquidation and integration stage.
But the difference is that new orders in China's shipbuilding industry recovered in 2010 after falling in 2008 and 2009. By 2010, China's shipbuilding completed volume reached 67.57 million tons, new orders 76.08 million tons, and hand-held orders 195.04 million tons, accounting for 41.9%, 48.5% and 40.8% of the international market share respectively, ranking first in the "shipbuilding magnitude" in the world.
This is mainly related to the different industrial policies introduced by China, Japan and South Korea. China Merchants Bank research report pointed out that after the 2008 financial crisis, Japan's share in the shipbuilding market was further compressed due to the technical advantage is no longer obvious, the loss of cost advantage, and with the transformation and upgrading of the Japanese industry, the Japanese government's support for the traditional manufacturing industry, including ships, was relatively weakened, and there was no complete industrial policy.
South Korea is gradually shifting its development focus to high-tech ships (such as large LNG) and offshore engineering business, retreating to the high-end market, and industrial policy is more focused on upgrading technology, supporting development, and maintaining competitive advantages.
At the same time, China, which is the center of the world shipbuilding industry transfer, has a comparative advantage in the small and medium-sized ship market. At the same time, the state issued the "Shipbuilding Industry adjustment and revitalization Plan" in 2009, emphasizing the need to expand the shipbuilding market demand to ensure the growth of the shipping industry, and take effective measures to stabilize the production of shipping enterprises.
Since 2010, the three major indicators of China's shipbuilding industry have maintained the first place in the world for 14 years, and behind this "magnitude growth", China's shipbuilding structure is also accelerating large-scale, high-end transformation, and constantly exploring high-end market share.
Taking the leading enterprise China Shipbuilding as an example, "Finance" combing through its production data over the years and expected future delivery found that its production structure is mainly composed of bulk carriers, oil tankers, container ships three categories, in 2022, its product delivery structure for the first time a large change, the delivery of 4 car carriers, 3 passenger rolling vessels and 7 LNG. The number of new ship types continues to increase in subsequent projected deliveries, with the first delivery of four cruise ships expected in 2026.
From a macro point of view, the data change of the production structure of a Chinese shipbuilding enterprise is actually a microcosm of the transformation of the entire Chinese shipbuilding industry, and the production structure is gradually changing from a single to a diversified one, from the traditional ship type to the high-end ship type with high added value.
From 2002 to 2008, although the completed volume and order volume of China's shipbuilding industry increased significantly, its ship production structure was still dominated by ships with low added value, and the LNG market, which represented the highest level of shipbuilding industry at that time, was once monopolized by South Korean shipping companies.
What loosened this tight market structure was the Dapeng Hao, delivered by Hudong Zhonghua in 2008. Taking ten years to overcome technical difficulties, this is China's first homemade LNG(hull volume of 147,000 cubic meters), but also the entire shipbuilding team regardless of the cost and difficulties to build the ship. Ultra-low temperature atmospheric pressure liquefied LNG, due to the cabin hull materials, manufacturing technology, safety design put forward extremely high technical requirements, and aircraft carriers, large cruise ships and known as the shipbuilding industry "three pearls in the crown."
The emergence of "Da Peng Hao" has broken the market barriers of high-end ship types, marking that China's shipbuilding industry is also capable of picking a "crown pearl". Since then, more Chinese shipping companies have broken through layers of technical barriers, matured in cruise ships, VLCC, very large liquefied gas carriers (hereinafter referred to as "VLGC"), very large ethane carriers (hereinafter referred to as "VLEC"), LNG and other technologies, and began to divide the market share of high-end ships.
By 2023, China will for the first time form a full spectrum of Marine products assembly and construction capacity, can manufacture 18 major ship types in the world, and 14 of the new orders have ranked first in the world.
Another interesting structural transformation is that the proportion of automotive ro-ro ship PCC production has increased significantly in recent years. According to Clarkson data, in mid-2020, the one-year daily rental of 6500 CEU(standard parking space) car carrier in the international market was still hovering at a low of $10,000, and with China's new energy vehicles going to sea and the shortage of international transport capacity, the market demand for this ship type gradually recovered from the downturn, and the rent rose all the way. By the end of 2023, it has reached $115,000 / day.
Domestic auto ro-ro shipment orders also began to appear in large numbers in 2021, showing blowout growth. According to Clarkson data, the number of new orders received by Chinese shipyards from 2021 to 2023 are 29, 65 and 71, respectively, accounting for 74.3%, 84.4% and 83.5% of the global market share, respectively.
04
2024 New shipbuilding cycle: According to the official website of the Ministry of Industry and Information Technology, in terms of deadweight tons, in 2023, China's shipbuilding completions, new orders and hand-held orders accounted for 50.2%, 66.6% and 55.0% of the global total, respectively, and 47.6%, 60.2% and 47.6% of the revised total tons. The international market share of all indicators has remained the first in the world.
Entering 2024, the high market continues. First half of 2024