Slump in ship orders rocking industry

Even though China's shipyards received a surge of orders in the first three quarters of 2013, a recovery is still far off, industry experts said.

Low prices and a preponderance of orders for low-value vessels are undermining the sector, they added.

New orders totaled 38.06 million dead weight tons, up about 147 percent year-on-year, according to the Ministry of Industry and Information Technology.

The order backlog stood at 114 million DWT, down 5.7 percent year-on-year. However, it was up 6.6 percent from the end of 2012.

CSSC Jiangnan Heavy Industry Co Ltd, a Shanghai-based subsidiary of China State Shipbuilding Corp, reported that its January-September operating revenue dropped 18.25 percent to 583 million yuan ($95.7 million). The company's main products are large container ships, steel products, machinery and ship fittings,

But Jiangnan said that its performance was hurt by low ship prices and rising operating costs such as power, steel and labor, as well as delayed debt payments from 17 other CSSC-affiliated shipyards.

Geng Weixiang, vice chief engineer of Shanghai Waigaoqiao Shipbuilding Co Ltd, another subsidiary of CSSC, said that even though it received many orders in the first three quarters, the prices of container and bulk ships hadn't gone up much.

"The industrial chain of China's shipbuilding sector is still weak. There's plenty of evidence that this industry is adrift amid hefty losses," Geng said. Chinese shipyards are only good at producing low-end ships such as container and bulk vessels, he added.