China’s Shipbuilding Industry Gets a Good Start for the 14th Five-Year Plan

China Association of the National Shipbuilding Industry

In 2021， the world economy recovered unevenly， the international shipping market showed a positive upward trend， and the global new shipbuilding market rebounded beyond expectations. China's three major shipbuilding indicators achieved comprehensive growth， the international market share remained leading， green transformation and development of ships accelerated， and the resilience of the industrial chain and supply chain improved， and the "14th Five-Year Plan" got off on the right foot. However， the external environment was becoming more complex， austere and uncertain， and under the pressure of insufficient labor resources and excessive rise in comprehensive costs， the shipbuilding industry still faces great challenges to maintain stable and healthy development.

Data

Three major shipbuilding indicators achieve overall growth

In 2021， completion of national shipbuilding hit 39.70 million dwt， increasing by 3% year-on-year (YOY); newbuilding orders received hit 67.07 million dwt， up 131.8% YOY; by the end of December， ship orders at hand stood at 95.84 million dwt， up 34.8% YOY.

In 2021， national completed export ships hit 35.93 million dwt， up 4.9% YOY; export ship orders received hit 59.36 million dwt， up 142.8% YOY; at the end of December， export ship orders at hand stood at 84.53 million dwt， up 29.6% YOY. Export ships accounted for 90.5%， 88.5% and 88.2% of national shipbuilding completion， newbuilding orders received and orders held at hand respectively.

Profit grows in step withrevenue

In January-November 2021， China had 1093 shipbuilding industry enterprises above the designated scale， and they realized main business revenue of RMB425.22 billion， up 9.6% YOY. The ship building sector registered RMB262.23 billion， up 8.4% YOY; the marine equipment sector recorded RMB73.75 billion， up 5.2% YOY; the ship repair sector reported RMB25.74 billion， down 9.6% YOY; ship modification enterprises garnered RMB3.27 billion， down 6.6% YOY; the marine engineering equipment manufacturing sector gained RMB54.38 billion， up 41.9% YOY; manufacturing enterprise for navigation mark appliances and other floating devices stood at RMB440 million， down 6.4% YOY.

In January-November 2021， shipbuilding industry enterprises above the designated scale realized total profit of RMB7.35 billion， up 56.4% YOY. The ship building sector registered RMB1.66 billion， down 5.3% YOY; the marine equipment sector recorded RMB2.38 billion， up 37.6% YOY; the ship repair sector reported RMB1.27 billion， down 17.3% YOY; ship modification enterprises garnered RMB410 million， down 7.9% YOY; the marine engineering equipment manufacturing sector earned RMB1.45 billion， turning losses into gains YOY; manufacturing enterprises for navigation mark appliances and other floating devices achieved RMB10 million， up 3.8% YOY.

Ship export value grows

In January-November 2021， Chinese ship export value hit $22.47 billion， up 18.6% YOY. Among Chinese export ship products， bulk carriers， oil tankers and container vessels still held the dominant position， exports totaled $12.83 billion， making up 57.1% of total exports. Ship products were exported to 187 countries and regions， and Asia remained as the principal area of Chinese ship exports. Value of Chinese ships exported to Asia， Europe and Latin America amounted to $11.6 billion， $4.6 billion and $1.3 billion， respectively.

Characteristics

Market share remains globally leading, with enhanced international competitiveness

In 2021， China's three major shipbuilding indicators remained globally leading， and the growth rate of new orders was higher than that of the world by more than 20 percentage points. Shipbuilding completions， new orders， and handheld orders accounted for 47.2%， 53.8% and 47.6% of the world total in terms of deadweight tons， respectively， up 4.1， 5.0 and 2.9 percentage points compared with 2020. The international competitiveness of backbone enterprises was enhanced， and 6 enterprises entered the top 10 in the world in terms of shipbuilding completions， new orders and handheld orders. For the first time， the three major shipbuilding indicators of China State Shipbuilding Corporation (CSSC) ranked first among the world's shipbuilding enterprise groups.

Structural adjustmentachieves remarkable results,proportion of subdivided ship typeson the continuous increase

In 2021， China's shipbuilding enterprises seized the opportunity of market recovery， consolidated the dominant position of bulk carriers， and undertook a total of 32.19 million dwt of bulk carrier orders， accounting for 76.4% of the global total. Container ship orders transcended， with a total of 27.38 million dwt of container ship orders， accounting for 60.9% of the global total， including 69 ultra-large container ships with 15，000 TEU and above， accounting for 49.6% of the global share. In the high-end ship segment， they continued to make efforts to undertake orders for chemical tankers， PCTCs， offshore engineering auxiliary ships and multi-purpose ships， accounting for 72.7%， 76.6%， 64.7% and 63.3% of the global total by deadweight tons， respectively. Among the 18 major ship types in the world， China’s new orders for 10 ship types ranked first in the world.

Green transformation of ships speeds up, green shipyard construction continuously promoted

In 2021， in order to comply with the trend of global green and low-carbon transformation， China's shipbuilding enterprises accelerated the pace of scientific and technological innovation， launched a variety of green ship types that meet the requirements of the latest international maritime rules， and the proportion of green power ships in new orders received throughout the year hit 24.4%. The 23，000 TEU dualfuel container ships， the 5，000 m3 dual-fuel full-pressure LPG carriers， and the 99，000 m3 very-large ethane carriers (VLEC) were successfully delivered to the shipowners. 210，000 dwt LNG powered bulk carriers， 7，000Car dual-fuel PCTCs， methanol-powered dual-fuel MR tankers achieved batch order-taking. Shipbuilding enterprises actively responded to the government’s call for "carbon peaking and carbon neutrality"， practiced the concept of green development， and continued to promote the construction of green shipyards. Backbone shipbuilding enterprises in major shipbuilding areas successively adopted devices of rooftop distributed PV power generation， highpower energy storage power stations and energy-saving facilities， achieve remarkable results in promoting energy conservation and emission reduction， with the average annual reduction of comprehensive energy consumption hitting 5-10 percentage points.

New breakthroughs of LNG equipment, new level for new ship R&D

In 2021， a major member was added to China's offshore LNG industry chain， as the domestic first 174，000 m3 floating liquefied natural gas storage and regasification unit (LNG-FSRU) and the world's largest 20，000 m3 LNG transport bunkering ship were successfully delivered， and the world's latest generation of "Changheng Series" 174，000 m3 LNG carrier was certified by 4 international classification societies. The research and development of new ship types reached a new level， and the R&D of ammonia fuel-powered VLCC， 93，000 m3 ultralarge green ammonia transport ship， and the first set of marine ammonia fuel gas supply system in China were carried out in an orderly manner. Progress was made in the domestic large-scale cruise ship project， and the milestone node of floating in the dockyard for the first large-scale cruise ship was successfully achieved. A new generation high-end Yangtze River cruise ship "Changjiang No.3" was officially delivered for use.

New progress made in marine equipment products, resilience of industrial chain and supply chain improved

In 2021， new progress was made in the development of China's marine equipment products， and bulk installation was realized for some projects. Industrial application was realized for the world's smallest bore marine low-speed dual-fuel (Otto cycle) engine， Type-B liquid cargo tank containment system， ultralarge underwater hydraulic windlass， R6 level marine mooring chain and other projects and products; the world's first integrated onboard selective catalytic reduction system (SCR)， the marine low-speed diesel engine CX52 that can meet the IMO Tier III emission requirements were successfully released and embarkment application was realized. Affected by the COVID-19 epidemic， some foreign marine equipment products could not arrive at the factory on time， and the domestic assembly enterprises and marine equipment product enterprises actively cooperated， made an effort in product substitution， installation and commissioning， ensuring the stability of the industrial chain and supply chain.

Pay close attention to production and operation management, make new breakthroughs in improving quality and efficiency

In 2021， amid tense and busy production tasks， shipbuilding enterprises strove to overcome many unfavorable factors such as the pandemic， high temperatures， typhoons， power rationing and production limitations， make an effort in the implementation of shipbuilding node plans， compress key cycles of construction， and improve shipbuilding efficiency. The typical ship construction cycle of domestic backbone shipyards was reduced considerably， and the construction cycle of VLCC and 23000TEU dual-fuel container ships was cut down by 20.7% and 21.8% respectively. The delivery rate of key projects and the on-time realization rate of nodes reached 100%， and more than 1/3 of the 50 shipbuilding enterprises under key monitoring completed the annual delivery task ahead of schedule.

In 2022， the uncertainty of the pandemic impact on the world economy still exists， the external environment is more complex and severe， but the confidence of the shipping and shipbuilding industries has been significantly boosted， coupled with the market opportunities brought about by the imminent entry into force of new international maritime environmental protection regulations and the demand for decarbonization， it is expected that the global demand for new ships will not shrink significantly in 2022， and the transaction volume will be around 90 million dwt. In 2022， it is expected that the completion of China's shipbuilding will exceed 40 million dwt， with somewhat decline of new orders.