Shipyards enjoy big rise in Q1

A ship built by Tianjin Xingang Shipbuilding Heavy Industry Co Ltd for a German company in 2012. China's shipbuilders got 9.57 million deadweight tonnage of new orders in the first quarter. [Yue Yuewei / Xinhua]

The nation's shipbuilders received 9.57 million deadweight tonnage of new orders in the first quarter of the year, a 71.1 percent surge on last year, but analysts still expect vessel prices to remain low because of newly added capacity.

The first quarter figures compare to 5.59 million DWT in the same period last year, according to the China Association of the National Shipbuilding Industry.

The rising new order book is in line with global industry trends, which show that shipbuilding orders grew 44 percent from a year ago to 20.58 million DWT for the quarter.

Industry analysts believe the global shipping industry has bottomed out and expect to see a pick up in fortunes next year and in 2015.

"In a slow market, shipping companies place more orders due to lower prices, and it usually takes nearly two years to complete a shipbuilding order," said Meng Lingru, an industrial analyst with Shanxi Securities.

Despite the pickup in new orders in China, completed orders during the quarter dropped 15.6 percent year-on-year to 9.45 million DWT, and total ongoing order weight dropped to 107 million DWT from 141.94 million of 2012, a decline of 24.6 percent year-on-year.

Li Xiaoguang, an industrial analyst with Shenyin Wanguo Securities, said in a research note that the figures showed the shipbuilding industry is consolidating, and is still at the bottom of its cycle.

Completed orders, newly received orders, and total ongoing orders are the key indicators for the shipbuilding industry.