Shipbuilding tonnage on the Chinese mainland is expected to grow by one-third this year from last year as a result of a booming domestic and international ship market, despite mounting raw material prices and power supply shortage, according to an industry organization.

The country's shipbuilding tonnage will reach a new record of more than 8 million tons this year, up from 6.05 million tons last year, said China Association of National Shipbuilding Industry.

During the first half of this year, the tonnage increased by 66 percent year-on-year to 4.09 million tons, accounting for 14.4 percent of the world's total, statistics from the shipbuilding association show.

China remains the world's third largest shipbuilding nation after South Korea and Japan.

Chinese shipbuilders received new ship orders of 9.9 million tons in the period, up 21 percent from a year earlier, according to statistics.

The figure is 19.3 percent of the world's total new ship orders.

"However, new orders will decline greatly during the second half of this year due to insufficient shipbuilding capacity on the mainland," said Tan Naisun, an official with the association.

Chinese shipbuilders' accumulated new orders surged by 62 percent year-on-year to 32.05 million tons by the end of June, 15.9 percent of the world's total.

China Shipbuilding Industry Corp (CSIC) and China State Shipbuilding Corp - the nation's two biggest ship manufacturers - controlled 75 percent and 74 percent of the total shipbuilding tonnages and new ship orders respectively from January to June this year, according to statistics.

Product mix of the shipbuilding sector has been improved significantly in the period with "robust growth in built tonnage and orders of containers and large oil tankers," the association said.

Chinese shipbuilders' new container orders accounted for 23.2 percent during the first half of this year, up from 3.4 percent in the same period of last year.

Dalian New Shipyard in Northeast China's Liaoning Province, controlled by CSIC, now has orders for nine 300,000-tonnage VLCCs (very large crude carriers) and 17 110,000-tonnage oil tankers.

Sales of 615 shipbuilders on the mainland grew by 28 percent to 31 billion yuan (US$3.7 billion) in the first six months of this year, according to the association's statistics.

They reported 610 million yuan (US$73.7 million) in profits in the period, compared with losses of some 200 million yuan (US$24.2 million) in the first six months of last year.

Meanwhile, however, the mainland's ship exports declined by 4.7 percent year-on-year to US$1.38 billion, the statistics show.

"Chinese shipbuilders should take the advantage of the booming ship market to improve operations to expand market share and deal with increases in raw material prices and power supply shortages," Tan said.

New ship prices in the world market are expected to continue to climb slightly during the second half of this year.

Prices of shipbuilding steel are still on the bullish side due to short supply in the domestic market.

Conditions will be improved as output of shipbuilding steel plates will exceed 3 million tons this year.

In the first six months of this year, output increased by 710,000 tons from a year earlier to 1.62 million tons.

Power supply shortage may not be alleviated considerably during the second half of this year.

Many shipbuilders in coastal Shanghai, Jiangsu, Zhejiang, Fujian and Guangdong Provinces all suffered a lot from power cuts in the first half of the year.

(China Daily September 10, 2004)