By Bloomberg News
(Bloomberg) — New orders received by Chinese shipbuilders fell by nearly half last year from 2014, suggesting more consolidation is in order as the country’s appetite for raw materials wanes and shipping rates languish at multiyear lows.
Shipbuilders in China received new orders amounting to 31.3 million deadweight tons last year, a world-leading 34 percent share of the global market, the Ministry of Industry and Information Technology said Monday. Backlog orders fell 12 percent to 123 million deadweight tons, or 36 percent of global market share.
Chinese shipbuilders have sought government support as excess vessel capacity depresses shipping rates, leading to contracts being canceled. South Korean and Singaporean shipyards are also feeling the pain, compounded by a bribery scandal in Brazil that has further affected orders.
China Rongsheng Heavy Industries Group Holdings Ltd.,once the country’s largest private shipyard, exited the sector last year amid heavy losses and changed its name to China Huarong Energy Co. to reflect its new business focus. In early January, Zhoushan Wuzhou Ship Repairing & Building Co. became China’s first state-owned shipbuilder to go bankrupt in a decade.
In a sign of ongoing restructuring in the sector, the 10 leading shipbuilders on the mainland accounted for 53 percent of total orders completed and 71 percent of new orders received in 2015, the ministry said.
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