I C E
ShipBuilding B Y PA U L B A R T L E T T, C O N T R I B U T I N G E D I T O R
C L A S S
TA N K E R S
Many Chinese shipyards may close their doors
T
hose with long memories may well recall the unprecedented misery endured by many of the world’s shipbuilders following a spate of over-ordering and shipyard capacity build-up at the end of the 1970s. Many now fear that the industry faces a similar spell of limited contracting and shipyard consolidation. For the most vulnerable, bankruptcy and closure may have seemed unimaginable two or three years ago, but may now be inevitable. There are certain key differences, however, between the last major shipbuilding crisis and the fight for survival facing many yards today. These include the fact that ocean trade, despite the downturn and as a result of globalisation, continues to expand at an average rate of about 4%, with non-OECD countries now well ahead in terms of trade
Sean Wang, CFO, Rongsheng Heavy Industries, believes that many Chinese shipyards will have to close
volumes. Then there is the cost of money. Double-digit interest rates prevailed through most of the 1980s, making today’s Libor rates of less than 1% look unbelievably cheap. But most importantly, global shipping now faces a completely new environment in terms of operating efficiency and environmental performance. Bunker costs of $750-plus are a complete game-changer, as are the requirements for improved design and operating efficiency generated by environmental concerns. Some experts are now suggesting that significant volumes of existing tonnage are already technically obsolete and, in light of poor markets, could well come to an early end. It is against this backdrop that the world’s largest shipbuilding nation— China—is preparing to streamline, ratio-
Sophisticated green ships from China For Chinese shipyards, 2011 was a rocky road and this year the path appears to be no less challenging. The overall size of the newbuilding market for 2012 is projected to be about 70 million to 80 million dwt. This will not be well matched with shipbuilding production capacity, which stands at about 120 million dwt. What this supply-demand
26 MARINE LOG JunE 2012 YEARBOOK
imbalance means is that prices for less sophisticated ships particularly will continue to be under pressure. In order to survive, Chinese shipyards will have to invest in R&D in more sophisticated vessel designs, particularly those that help ship operators meet stricter current and future environmental regulations such as
Energy Efficiency Design Index (EEDI). One example is the Green Dolphin bulk carrier concept from Shanghai Merchant Ship Design & Research Institute (SDARI). It’s teamed with Wartsila and DNV to create a design concept for a handysize carrier that meets current and expected air and water emissions regulations and achieves low fuel consumption and its projected EEDI is more than 20 percent below the IMO reference point for bulk carriers. The Sinopacific Shipbuildng Group, meanwhile, has unveiled the Crown 63 (60,000 dwt), Crown MHI 82 (80,000 dwt) and Crown 121 (120,000 dwt) series of bulk carriers. The three designs are “energy saving and
environmentally friendly.” Fuel consumption on the Crown 63 Ultramax bulk carrier, for example, is reduced to 25.8 tons/day at a service speed of 14.3 knots. GREENSHIP Singapore has taken delivery of four sister ships. “The friendly design of Crown 63 is in conformity with the environmental protection policies of Singapore. Based on the attained EEDI stage 2 value of the ship, it has achieved a reduction factor of up to 20% making it eligible to a serious reduction in Initial Registration Fees as well as Annual Tonnage Tax rebates till 31 Dec 2019.” The CrownMHI 82 is a bulk carrier jointly developed by Sinopacific and Japan’s Mitsubishi Heavy Industries, Ltd. (MHI).
www.marinelog.com