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16-03-2019

Japan’s Feb vessel orders for export drop 20% on year

Japanese shipbuilders received 13 vessel orders for export in February, totaling 714,400 gross tons, down 20.4% year on year on a gross tons basis, latest data by the Japan Ship Exporters’ Association published Thursday showed.

However, steel consumption will remain stable, a JSEA official said.

The JSEA official said the orders fell on a year on year basis because orders received in February 2018 was high, but February 2019 orders rose 5.7% on a month-on-month basis.

“We understand shipbuilders are receiving steady orders, but we are concerned about the drop in backlog orders held by shipbuilders,” he said.

Backlog orders for vessel exports held by Japanese shipbuilders stood at 24.97 million gross tons across 493 vessels in February, down 6.8% year on year, and 3.1% from January 2018, according to JSEA data.

The JSEA official said that shipbuilders currently hold about two years worth of backlog orders, but there will be an increase in deliveries in March because it is the last month of the current fiscal year. There will be fewer backlog orders after April.

“Shipbuilders will have to become more aggressive to accept orders, but shipbuilding costs are increasing and they will face difficulties negotiating prices,” he said.

He also said that ship owners will have to take into consideration the changes in regulations by the International Maritime Organization starting January 2020. This may increase shipbuilders’ chances to receive more orders, which will allow steel consumption by shipbuilders to stablilize.

Ordinary steel orders booked by Japanese shipbuilders in December totaled 354,495 mt, up 13.1% year on year, and 15.6% from November, according to the latest data by the Japan Iron & Steel Federation.
Source: Platts

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