Sunday, May 3, 2009

47% Decline In Ship Orders Actually Good News

The JSEA represents the major Japanese shipbuilders, including Mitsubishi Heavy Industries, Imabari, IHI, Mitsui, Universal, Kawasaki and Sasebo

Japan has been steadily losing market share for traditional ships over the last two decades to Korea and now to China. Japan has responded by focusing on higher tech vessels and high-spec traditional ships.Japanese shipyards enjoy a virtual monopoly in building ships for domestic shipping lines. The numbers reported were for export vessels. While certainly not the numbers one would wish to publish, they actually tell a remarkable tale of resiliency. Competition yards in Korea and China have seen new orders virtually disappear since 1Q08, and have been fighting order renegotiations and cancelations. According to the JSEA, the combined order backlog in March of 2009 is at 1,312 ships versus 1,335 in March of 2008. Any of the Korean or Chinese yards would love to have their backlogs show similar trends.
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