It has been a busy couple of weeks for China's yards as this week's orders demonstrate. Perhaps most importantly Dalian New Shipyard has at last secured the long mooted VLCC (Very Large Crude Carrier) orders from Iran. The tankers are reportedly priced at about US$70 million (S$118.3 million), much in line with prices recently reported in Korea and Japan.
Getting VLCC orders has long been a major objective for China. Being able to build such massive ships is often seen as a sign that a country's shipbuilding industry has come of age. Currently Japan and South Korea are the only two other countries building VLCCs. The current extremely low prices ensure that no European or US yard would dream of entering this particular market.
In terms of tonnage under construction, China is number three in the world, but still well behind Japan and South Korea. According to the latest statistics from Fairplay Shipping Weekly, Japan has 34.8 million dwt in its national order book, South Korea has only slightly less at 33.0 million dwt while China has 6.4 million dwt. But while China may still lag behind the Asian shipbuilding giants, it is certainly catching up and there must be little doubt that, barring the unexpected, the country's shipbuilders will steadily increase their market share over the coming decade. The country now has some three dozen yards building substantial seagoing vessels and all but a handful of these have export orders. Those overseas orders far outnumber domestic contracts.
In the past some foreign owners were wary of Chinese yards, fearing that there would be insufficient expertise in the workforce and that a high degree of supervision of the construction would be required. To some extent these concerns had sound basis. Nevertheless, there is now a growing body of international owners who are prepared to place repeat orders in China. These include some of the biggest names including AP Moller which has product tankers at order at both Dalian New Shipyard and Guangzhou Shipyard.
Shipping Times article by David Hughes
More information: Shipping Times