Shipbuilding industry cruises amid headwinds

The global shipping market has witnessed a significant increase in demand for fleet renewal. The rise in shipping costs due to various economic and political factors worldwide has also led to a notable increase in new shipbuilding orders, said Peng Bo, a researcher specializing in foreign trade at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

Han Jianfeng, president of the China unit of Wartsila Corp, a Finnish ship engine manufacturer, said current demand for orders is mainly concentrated on large vessels with advanced technical requirements, but there is a severe shortage of global production capacity for high-end vessels like mega dual fuel-powered container ships and liquefied natural gas carriers.

China is among the few countries globally that possess both advanced technology and large-scale shipbuilding capabilities. The country's well-developed industrial chains provide its shipbuilding companies with a competitive edge in cost control and production efficiency.

China's ship exports amounted to $20.67 billion between January and June, soaring 85.2 percent year-on-year, according to CANSI data.

On a monthly basis, the average monthly export value was $3.4 billion, with a year-on-year growth rate consistently above 30 percent. This growth rate ranked first among the key electromechanical product exports from China during that period.

Chinese shipyards, including Liaoning province-based Dalian Shipbuilding Industry Co and Shanghai-based Hudong-Zhonghua Shipbuilding (Group) Co, have already upgraded their production capacity to accommodate high-tech vessel types, aligning with evolving market demand.

For instance, Shanghai Waigaoqiao Shipbuilding Co has stepped up the research and development of ultra-large as well as medium-sized and small cruise ships, after delivering China's first domestically built large cruise ship to its owner last year.

Zhou Jinglei, vice-president of Taizhou Sanfu Ship Engineering Co, a Taizhou, Jiangsu province-based shipyard, said the company currently has 45 orders in its backlog, with production planned through 2027.

"We have increased our investment in technological innovation to develop high value-added ships equipped with advanced methanol and LNG dual-fuel power systems, while maintaining our advantage in building multipurpose heavy lift vessels," said Zhou.

Dual fuel-powered container vessels can significantly reduce carbon, nitrogen oxide and sulfur emissions compared to traditional fuel-powered containerships, he added.