ECONOMY

Shipbuilding sector shows robust growth

Orders for new ships in the first quarter of 2007 rose 10 percent compared to the same period in 2006, a year in which international demand for new ships skyrocketed by 40 percent. This rapid growth in orders saw China climb to the top on the list of shipbuilding countries, according to the annual report of the Community of European Shipyards Association (CESA). In the first quarter of the year, China was reported to claim a 38-percent share of the overall global orders for new ships, followed by South Korea with 33 percent. At the end of 2006, the world order book rose to 130.4 million compensated gross tons (CGT), an amount that stands 3.8 times higher than the current overall shipbuilding industry capacity. Container carriers account for 24 percent of orders, followed by product/chemical tankers with 17 percent and dry cargo ships and tankers with 14 percent each. With regard to European shipyards, total orders in 2006 were up 20 percent compared to 2005, with the order book hitting a record-high at 17 million CGT at the end of 2006. However, new orders in 2006 did not actually follow the strength pattern of previous years, exceeding shipbuilding annual output by a mere 15 percent. Orders for container carriers placed with European shipyards account for 26 percent, with second place taken by passenger ships, with 25.4 percent. Preference for Asian shipyards is the result of great differences in steel prices, with Europe being more expensive. In January 2007, the steel price difference was already high with some 30 percent, and current data indicate that European steel is today up to 63 percent more expensive than Asian. «A price difference of $350 per ton is not tolerable and requires urgent attention,» the CESA annual report said. Icebreakers More than 70 icebreakers are currently under construction around the world, which are to be added gradually to the current 250-strong fleet of tanker/icebreakers over the next five years. Shipping sector officials believe that more ships are to be needed to transport Russian oil from northern states to Europe as major oil companies have already expressed interest in getting involved in oil drilling. They also believe that the number of Russian terminals for oil loading should rise, while they estimate that freights will go up as a result of the withdrawal of many of the older tankers that are currently operative.