China captures 82% of global new ship orders

China has gained significant control over the global shipbuilding market, with its shipyards securing 81.8 percent of all new orders in the first nine months of the year, according to official figures. Analysts anticipate this trend to persist, with high crude oil prices fueling demand for new vessels. At the end of September, Chinese shipyards held 399.13 million deadweight tonnes (dwt) worth of outstanding orders, representing 72.4 percent of the global total.

The completion of vessels with a combined carrying capacity of 58.05 million dwt accounted for 63 percent of the global total during the first three quarters. State broadcaster China Central Television emphasized the crucial role of domestic supply chains in maintaining China's dominance in the industry. Constructing a massive container ship, capable of carrying 24,000 twenty-foot equivalent units, necessitates around 50,000 tonnes of steel and numerous components, according to CCTV.

These projects often involve over 200 suppliers from various industries, including steel, electrical engineering, and machinery. Experts predict that the global shipbuilding market will remain strong, with China maintaining its largest share. Analyst Yue Xin from Shanghai-based Guotai Haitong Securities noted that container ships currently dominate the order book, constituting 39.8 percent of the global demand so far this year.

However, she highlighted a significant rise in orders for very large crude carriers (VLCCs), with European shipowners driving this shift. As many vessels in the VLCC fleet are over 20 years old, they are typically retired after 20 to 25 years, necessitating replacements. The surge in demand is driven by the need to replace aging tankers and the increase in crude oil prices, which have boosted the five-year time-charter rate for VLCCs to US$50,000 per day.

Shipbuilding capacity has also expanded at a "slow and restrained" pace, contributing to the ongoing boom in the sector. Analyst Yao Pei from Huachuang Securities in Guizhou believes the trend will continue, citing China's competitive advantages as the primary reason for potential further expansion of its global market share.