China’s shipbuilders sailing smooth as wave of demand drives exports

The country also took 54.22 million deadweight tonnes of new orders with 171.55 million deadweight tonnes in orders on hand, accounting for a respective 74.7 per cent and 58.9 per cent of the world’s market share.

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China’s ship exports reached US$20.7 billion in the first half of the year, an increase of 85.2 per cent year-on-year – the highest level of ship exports over the first half of any year since the start of the pandemic. Container exports, meanwhile, have reached a new peak after a sustained spike in 2021.

Instead, many have opted to use the Cape of Good Hope as a diversion, increasing demand for ships as well as containers for global maritime transport.

“The Red Sea crisis has led to longer journeys and reduced idle capacity,” said Gary Ng, senior economist with Natixis investment bank. “There is also a structural demand for new ships to replace the old fleets and meet new green regulations.”

The strong maritime demand is likely to continue to support robust exports of containers and ships, especially LNG carriers, for the rest of the year, Ng added.

As the average age of the global fleet has reached 13.7 years, a peak of ship renewal and replacement is imminent, according to a report by Soochow Securities in June, and China’s ship makers are expected to continue to benefit from the wave.

Since April, global shipping prices have continued to rise due to supply chain disturbances brought by the Red Sea crisis. China’s container exports have exceeded US$1 billion since April, up 53.9 per cent from a month earlier, according to customs data.

In the first six months, 36.2 per cent of its container exports went to Hong Kong, while 16.2 per cent were bound for the United States.

Spot offers for 40-foot containers departing from China’s Shanghai or Qingdao to the port of Rotterdam in the Netherlands were generally around US$8,000.

This is about double the price observed in mid-May – and more than five times the cost last November, before the crisis began – according to a July report by the Securities Times, a Chinese state financial outlet.