Shipbuilding in 2012
Shipbuilding did not enjoy the best of years in 2012. Although on the surface
things seem satisfactory, with many yards reporting that production is still
high and order books are full, the realisation that far less healthy times are
just around the corner.
As an industry, shipbuilding, although moving in cycles, tends to be less
extreme in the ups and downs than many other sectors, and to follow trends
rather than initiate them. A boom in manufacturing means more ships are
required, to take raw materials to where they are needed, then to transport the
finished goods to where they are sold. As demand reduces, as it is bound to do
in times of global recession, demand for ships dries up but because of long
lead times, typically around three years from initial order to delivery the
supply of ships steadily continues for some time ahead.
This is exactly the situation facing most fleets today. Shipowners find they
have surplus capacity, and as ships ordered during and at the tail end of the
period of high demand are delivered, the surplus increases. Many owners are
having to decide whether to keep ships running despite charter rates that
barely, if at all, cover costs, or to lay up ships and cancel orders. Layup,
even though ships are not being used, incurs continuing cost, and most
newbuilding contracts include substantial penalties for cancellation. So it is
difficult to make the maths add up and in the absence of returns on
investment, financiers turn away from shipping as a worthwhile home for their
money.
The situation is not helped by sharply rising operating costs, not just in
terms of fuel, but in meeting increasingly strict regulations.
One equation that does have a solution is that with surplus capacity, orders
for new ships will all but dry up and this is what is happening. Once the
present spate of orders is fulfilled, shipyards face a bleak future.
Some sectors are still doing well, for example offshore support ships, and gas
carriers. Demand for energy means that oil and gas need to be extracted from
new field, many of which are in deep water or Arctic regions, necessitating a
new breed of ship with enhanced capabilities and equipment. The growing demand
for natural gas as a fuel means more specialised ships are needed to transport
the gas over longer distances, with equipment for handling and liquefying the
gas. Another fast-growing energy-related sector is in wind farm erection and
servicing, which, with more and larger offshore wind farms being built and
planned, needs new, specialised ships, of considerably greater capacity than
the workboats which have served the market up to now.
Many yards are trying to diversify into these specialised sectors, although not
all are likely to succeed designing and building smaller specialist ships is
quite different from the deep sea bulkers and tankers that have provided the
bread-and-butter for the largest shipbuilding nations. European yards have
traditionally dominated this market, and this continues, but European
(Norwegian in particular) designs are being built in China and Brazil.
It's a similar story with passenger ships. European builders are losing orders
to Asian yards, as they begin to seriously enter the cruise and ro-pax markets.
German yards seem to have been particularly hard-hit, with several insolvencies
in the past year. Two Meyer Werft, specialising in cruise ships, and ro-ro
specialist FSG seem to be more than holding their own, though both have
looked at diversification. One of the less fortunate groups was P+S, where the
problem seemed to be one of too many orders rather than too few; it simply took
on more newbuilds than it could handle, resulting in late deliveries, penalties
and cancellations.
Up to fairly recently, the more specialised ship types held little interest for
the yards in Korea and China (and previously Japan). There was a domestic
market to be served, but internationally more orders could be won, and greater
profits made, by concentrating on the relatively lower-tech merchant segment.
In fact it was previously said that this practice was hindering the move
towards more efficient ships. The yards were winning orders for basic,
simple-to-construct vessels often based on very old designs, so any owner
wanting something more up-to-date and out of the ordinary had to take his place
at the back of the queue, and look at five- or six-year delivery times.
That, at least, has changed. The slowdown of new orders means that there is
plenty of capacity in the shipyards, and owners not builders - can call the
tune. No longer is it just a matter of getting a new ship to directly replace
old tonnage. Owners can specify a ship which burns less fuel per unit carried,
and complies with existing and forthcoming emission limits.
Some of the major container carriers have decided that one way to reduce cost
per mile per unit carried is to carry more on each vessel. This has initiated a
size war as to who can have the greatest number of TEU which gives the
boxship builders some solace. Currently the largest capacity afloat is the
16,200TEU quoted for CMA/CGM's Marco Polo. Nevertheless, the ship's physical
dimensions are significantly smaller than the Emma Maersk class, for which a
capacity of 15,500TEU is quoted. Mere TEU can be misleading; Maersk tends to
count the maximum capacity of loaded containers, while several other carriers
quote the maximum number of containers, whether full or empty. But the design
for the ten Triple-E ships ordered by Maersk from DSME in Korea is quoted at
18,000TEU capacity, in a ship not much larger than the Emma Maersk.
Not only are there several ultra-large container ships on order, but as ships
get bigger, with deeper draught, the number of ports that can accommodate them
reduces, so there is a consequent demand for smaller feeder ships.
In fact size is giving another much needed, albeit small, fillip to the world
shipbuilders, with the enlargement of the Panama Canal to take larger ships.
The new third set of locks, scheduled to come into use in 2014, will
effectively more than double the canal's capacity allowing, for example, a
new breed of `New Panamax' container ships of around 12,000TEU to pass through,
compared with the current maximum of around 5,000TEU. But the largest boxships,
and VLCCs will still be too large.
Until recently, propulsion power was given as the main limiting factor to ship
size. The Emma Maersk class has a 14-cylinder 96cm-bore Wärtsilä main engine,
currently the most powerful afloat at 81MW. It may be possible to build a
single engine to produce more power, but the size of the propeller required
would equate to too deep a draught for most current ports. But the current move
towards slow steaming, or even ultra slow steaming, means that such power is no
longer necessary. Although most owners are, naturally enough, reluctant to
permanently limit speeds to the 10-14 knots commonly used in a slow steaming
regime Emma Maersk is capable of over 25 knots it looks as if more modest
speeds are here to stay, and the Triple-E will have lower installed power than
Emma Maersk.
Even so, reports indicate that Maersk has opted for a twin-screw propulsion
system for the Triple-E. This will be based on two MAN ultra-long-stroke
diesels, with a total output of around 64MW. The original concept accommodated
either a single engine, as in Emma Maersk, or the twin-screw installation.
Although a single engine arrangement is generally reckoned to be more
fuel-efficient, in this case the twin-engine installation won, on grounds of
propulsion efficiency. MAN says that its ultra-long-stroke, and hence lower
revolutions, allows the use of larger propellers, with a significant increase
in efficiency, in this case sufficient to offset the use of two engines rather
than one larger unit. The Triple-E engines will be equipped with shaft
generators and a sophisticated waste heat recovery system developed by Siemens,
for further fuel savings, while the inherent redundancy of the twin-screw
arrangement offers a useful safety benefit, enhancing the `green' credentials
even further.
Fuel saving and efficiency is gaining in importance. Charterers are demanding
that their goods are carried in the `greenest' way possible, with growing
insistence on environmental awareness. Sea transport is of course
environmentally friendly; there is that oft-quoted statistic that over 90% of
the world's goods are carried on ships, yet it produces only 3% of the total
air pollution. However, that is far from the whole story, as we know. 3% still
represents a considerable tonnage of CO2, and the type of fuel and the engines
used mean that shipping is responsible for a very large proportion of sulphur
and nitrogen oxide emissions.
IMO's Marpol regulations are going through a continuing updating process, as we
all know, to address these concerns, with sulphur emissions in a growing number
of emission control areas (ECAs) being cut drastically from 2015, and further
NOx limits coming in with Tier III in 2016. A further, this time global, cut in
sulphur emissions, is planned for 2020, although this looks likely to be put
off until 2025.
More pressing is the need to be seen to be acting on greenhouse gases.
Shipping's major contribution to these is CO2, and the way to cut carbon
emissions is to reduce the amount of fuel burned. This actually sits happily
alongside owners and operators' needs to cut fuel costs, so the quest for
shipping efficiency should be a win-win situation. The important first step in
the official action to limit carbon emissions comes with the advent of 2013,
and that is the introduction of the EEDI and SEEMP, energy efficiency design
index (for new ships) and ship energy efficiency management plan (for all
ships) respectively.
A ship with a favourable EEDI is likely to be more attractive in the charter
market, and thus should command a premium, and will also have a higher
second-hand value. So at last there is an incentive, in international maritime
law, to design and build efficient ships. No wonder there are those who want
the EEDI to apply across the whole fleet, not just newbuilds. But how the EEDI
is established, and how it is used, is still a controversial question in some
circles.
The SEEMP is less of a design matter, more an operational one. It is, as the
name suggests, a plan that suggests the most efficient way of operating the
ship, taking into account maintenance, loading, ballasting, trim, speed,
weather routing and the like. A recent survey by Napa of Finland, a company
developing, among other things, loading calculation software, suggested that
the vast majority of shipowners thought the SEEMP to be a `good thing' as far
as shipping's environmental credentials are concerned, but only some 40% were
aware of the SEEMP's potential as a fuel saving, and hence cost-cutting
measure. The remaining 60% saw the SEEMP as mainly a paperwork exercise.
But what do these developments mean to the yards, and their suppliers,
themselves? Although, as mentioned earlier, shipbuilding production has been
maintained at similar high levels in 2010, 2011 and 2012, peaking at about 50
million gt/year, the forward orderbook shows that this will diminish rapidly,
to very low levels indeed for 2014 onwards. The situation is exacerbated by
excess-tonnage in the existing fleet, which analysts like Drewry see as being
combined with poor levels of operating efficiency which is hindering a
recovery, so even if the shipping market should turn around it will not
immediately result in new orders. Moreover, Drewry points out that the
orderbook is dominated by bulk carriers and containerships, two of the worst
hit markets in terms of over supply wreaking havoc with rates, which reflects
the fact that for some time now ordering activity by shipowners has exceed the
requirements of trade growth.
We remember remarking in The Motorship on a statistic presented at the height
of the ordering boom that the amount of available money in the world was
scarcely sufficient to finance all the ships on order, so something had to
give. At the time, such a view seemed rather extreme, but since then we have
seen a particularly severe global recession and severe problems in the banking
sector, giving that outlook more than a little credibility.
Analysts expect the orderbook to remain flat at least until 2016, and probably,
if funding for shipowners continues to be limited, there will be a bitter fight
for survival among shipyards.
The current market is dominated by China and South Korea, both of which see a
tough time ahead. Korea's International Trade Association and Hyundai Research
Institute have both studied the declining demand in overseas markets.
Unfavourable exchange rates, the eurozone crisis and increased protectionism
are all seen as potentially having a negative effect on exports. As Korea is
home to the three largest shipbuilders, Hyundai Heavy Industries (HHI), Samsung
Heavy Industries and Daewoo Shipbuilding and Marine Engineering, all of which
have forecast sharp reductions in profits following a poor 2012, the situation
looks bleak. HHI has made job cuts and both executive and shopfloor levels to
help cope with the worsening business situation.
It's a rather similar story in China, which overtook Korea to become the market
leader in terms of shipbuilding tonnage. Although there are plenty of
unfinished orders, these are not thought to be sufficient to tide the yards
over until such time as shipping recovers. At least one major shipyard group,
Jiangnan, was reported during 2012 as having laid some of the blame on the
Chinese government for failing to control the rapid expansion of shipbuilding
capacity. This view was echoed by the director general of the Shanghai Society
of Naval Architects and Marine Engineers, Zhang Shengkun, who said that lack of
market foresight led to excess capacity, and the fast expansion meant that
there had been little progress in industrial upgrades, meaning China was
comparatively poorly placed to take advantage of any rising demand for high
value-added and energy-efficient ships. This problem is being addressed under
the current government five-year plan, with policies to promote the
shipbuilding industry and the development of engineering expertise, offering an
opportunity for the industry to move up the value chain.
Such moves are not before time; production at Chinese yards declined steeply
during the first three quarters of 2012, according to the China Daily.
Completed orders dropped by 18.5% to 41.58 million dwt compared with 2011, and
the decline was even more marked in new orders, which decreased by 46.9%
year-on-year to 15.41 million dwt, according to data from the Chinese Ministry
of Industry and Information Technology.
Yard closures seem inevitable; and the outlook is pessimistic. Tan Zuojun, a
former general manager of China State Shipbuilding Corp, said that at least
half of China's 3,400 shipyards will fail within the next three years, while
some analysts were quoted as saying that only 300 of the biggest yards will
still be operating by the time the market turns the corner.
Over 30 years since the reform and opening up, China's shipbuilding industry
continuously expands, and it makes direct contributions to China's water
transportation industry, aquatic fishery, marine development industry, etc. Its
status in China's national economy continuously rises. The shipbuilding
industry is one of the few Chinese manufacturing that rank among the top
worldwide and compete with advanced levels in the world.
Some industry experts take a more favourable view. While recognising that the
worldwide recession is having a negative impact on Chinese shipbuilding, they
feel that the country's government regards shipbuilding as an important sector
in China's economy and will encourage technological advances and
diversification into the better-performing market segments. A continuing price
differential should favour Chinese shipyards over their higher-cost competitors
in Korea and Japan, so China should continue to do relatively well.
Source: Motor Ship
------------------------------------
1. Moderator tidak bertanggung jawab atas kebenaran isi dan/atau identitas
asli pengirim berita.
2. ATTACHMENT akan dibanned, krmkan ke pelaut-owner atau upload ke FILE.
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/pelaut/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/pelaut/join
(Yahoo! ID required)
<*> To change settings via email:
[email protected]
[email protected]
<*> To unsubscribe from this group, send an email to:
[email protected]
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
