Japanese shipyards have announced their first capacity expansion in 30 years, pumping in US$409 billion to boost output by 10 per cent, as shipyards around the world struggle to keep pace with rising shipbuilding demand.
Rising demand: Major Japanese shipyards, such as Mitsui Engineering and Shipbuilding, are investing the equivalent of US$136 billion per shipbuilder up to 2009, aimed at meeting the surging demand
Major Japanese shipyards like Ishikawajima-Harima Heavy Industries, Kawasaki Heavy Industries and Mitsui Engineering and Shipbuilding are investing the equivalent of US$136 billion per shipbuilder up to 2009, aimed at meeting the surging demand.
While some of the capacity will be directed at the bulk carrier market, a rising domestic demand for liquified natural gas (LNG) carriers is also a key impetus, say industry analysts.
Korean shipbuilders are also ramping up expansion with investments of nearly US$1,930 billion, equivalent to US$643 billion per shipbuilder, according to a Kim Eng research report.
Because the global backlog has reached an average of 3.5 years - Japan 3.2 years, Korea 3.5 years and China 3.7 years - the Japanese capacity expansion will have little impact on the South Korean and Chinese yards, Kim Eng said.
Singapore yards are not impacted because of their niche specialisation ... Their focus is concentrated on the offshore oil and gas sector.
Singapore yards are not impacted because of their niche specialisation, which, in the current environment of sustained high oil prices, means their focus is concentrated on the offshore oil and gas sector.
While shipbuilders the world over have enjoyed healthy profits due to the soaring demand from the buoyant shipping industry, price volatility of steel plates, now hovering around US$600 per tonne, has eaten into their profits.
Meanwhile, Chinese shipyards have outpaced their South Korean rivals in winning new shipbuilding orders in the first four months this year.
Chinese shipyards secured new orders totalling 8.5 million compensated gross tons (CGTs) for the January-April period - 20 per cent of total global orders - up 65 per cent year on year, according to Clarkson Research.
South Korean shipbuilders like Hyundai Heavy Industries and Samsung Heavy Industries received a combined 6.9 million CGTs in new orders for the period representing a 7 per cent increase, while Japanese yards notched 1.2 million CGTs, down 72 per cent from a year earlier.
With backlogged order books, analysts say the Japanese and Korean yards were unwilling to take new orders, while the rapidly expanding Chinese yards were more than happy to absorb the overflow.
South Korea, home to seven of the world's top 10 shipyards, maintained its ranking as the top shipbuilding nation in terms of annual volume of vessels built.
Korean yards built 3.2 million CGTs in the first four months of the year, nearly triple that of the Chinese yards' 1.2 million CGTs.
China, which is rapidly moving into higher value vessels including crude oil tankers, LNG carriers, container ships and offshore oil and gas rigs, is hoping to overtake Korea to become the world's largest shipbuilding country by 2015.
China is the second-largest builder of oil tankers with a 36 per cent global market share and the fourth country in the world after South Korea, Japan and Denmark to build 8,000 TEUs container ships.
Rising demand: Major Japanese shipyards, such as Mitsui Engineering and Shipbuilding, are investing the equivalent of US$136 billion per shipbuilder up to 2009, aimed at meeting the surging demand
Major Japanese shipyards like Ishikawajima-Harima Heavy Industries, Kawasaki Heavy Industries and Mitsui Engineering and Shipbuilding are investing the equivalent of US$136 billion per shipbuilder up to 2009, aimed at meeting the surging demand.
While some of the capacity will be directed at the bulk carrier market, a rising domestic demand for liquified natural gas (LNG) carriers is also a key impetus, say industry analysts.
Korean shipbuilders are also ramping up expansion with investments of nearly US$1,930 billion, equivalent to US$643 billion per shipbuilder, according to a Kim Eng research report.
Because the global backlog has reached an average of 3.5 years - Japan 3.2 years, Korea 3.5 years and China 3.7 years - the Japanese capacity expansion will have little impact on the South Korean and Chinese yards, Kim Eng said.
Singapore yards are not impacted because of their niche specialisation ... Their focus is concentrated on the offshore oil and gas sector.
Singapore yards are not impacted because of their niche specialisation, which, in the current environment of sustained high oil prices, means their focus is concentrated on the offshore oil and gas sector.
While shipbuilders the world over have enjoyed healthy profits due to the soaring demand from the buoyant shipping industry, price volatility of steel plates, now hovering around US$600 per tonne, has eaten into their profits.
Meanwhile, Chinese shipyards have outpaced their South Korean rivals in winning new shipbuilding orders in the first four months this year.
Chinese shipyards secured new orders totalling 8.5 million compensated gross tons (CGTs) for the January-April period - 20 per cent of total global orders - up 65 per cent year on year, according to Clarkson Research.
South Korean shipbuilders like Hyundai Heavy Industries and Samsung Heavy Industries received a combined 6.9 million CGTs in new orders for the period representing a 7 per cent increase, while Japanese yards notched 1.2 million CGTs, down 72 per cent from a year earlier.
With backlogged order books, analysts say the Japanese and Korean yards were unwilling to take new orders, while the rapidly expanding Chinese yards were more than happy to absorb the overflow.
South Korea, home to seven of the world's top 10 shipyards, maintained its ranking as the top shipbuilding nation in terms of annual volume of vessels built.
Korean yards built 3.2 million CGTs in the first four months of the year, nearly triple that of the Chinese yards' 1.2 million CGTs.
China, which is rapidly moving into higher value vessels including crude oil tankers, LNG carriers, container ships and offshore oil and gas rigs, is hoping to overtake Korea to become the world's largest shipbuilding country by 2015.
China is the second-largest builder of oil tankers with a 36 per cent global market share and the fourth country in the world after South Korea, Japan and Denmark to build 8,000 TEUs container ships.