CPPCC member Hu Keyi: This year's ship market is weaker than 2008

Hu Keyi, member of the National Committee of the Chinese People's Political Consultative Conference and chief engineer of Jiangnan Shipbuilding (Group) Co., Ltd., believes that the market prospects of China's shipbuilding industry in 2012 are not optimistic, even worse than the 2008 financial crisis.
"This year's ship market is very bad. The biggest problem is the lack of orders and overcapacity." Hu Keyi said in an exclusive interview with Caixin.
Hu Keyi believes that the market industry this year is worse than 2008. "There are some phenomena that can explain the problem. The first is the seller's credit, that is, the shipowner orders, but requires the loan in the name of the shipyard; the second is the light rent, that is, some shipowners want to set the ship, the credit is not good enough, let the shipyard set up Special companies act as shipowners and then charter to real buyers. Both modes are only when the ship market is very bad, and now these phenomena are there," Hu Keyi said.
In October 2008, the unforeseen financial crisis affected various industries and the shipbuilding industry was not spared. Hu Keyi said that although the financial crisis has hit, but the half year of 2008 has passed, the overwhelming shipowners have placed orders, and the shipyards have no time to do so, so the situation is not very bad. In 2009, everyone had stock orders. From the second half of 2009 to 2010, some shipping companies added orders because some of the tasks in the 11th Five-Year Plan were not completed. “It is particularly noteworthy that a number of shipowners with energy backgrounds, such as power plants and oil companies, started to build ships, which made many orders in 2010.”
The performance turning point began to appear in 2011. “Although there is a lot of rigid demand, everyone’s production capacity has been released, and the order quantity is insufficient. In addition, the European economy is not good, the Chinese economy is slowing down, and the contradictions of all parties are highlighted.” Hu Keyi stressed, “But carefully pondering the state’s The industry's revitalization adjustment plan, only revitalization has no plan. Although the NDRC emphasizes that more than 10,000 tons of docks need to be approved, there are many that have not been approved for further reconstruction. And 10,000 tons is a vague concept, for the flexible design of the shipbuilding industry It is difficult to limit. From the overall effect, it is not regulated."
Hu Keyi is not optimistic about whether there will be a wave of mergers and acquisitions. He analyzed that the company that can go to other people's enterprises also has its own problems. Otherwise, the company may not be able to expand its production capacity, or the enterprise is more reluctant to take out the money. In addition, the competition for misalignment of products between domestic ships is not obvious, and there is no new order. One pot of rice is still looking for one person to eat. The difficulty can be imagined.
"At present, there is a collapse in the market, but I have not seen a few companies fail. Wherever there is a growth point, it is impossible to count the small companies that can't be withdrawn. The shipyards above the scale have not closed down," Hu said.

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