Shipyards need to
SHIPYARDS are in need of new
strategies to cope with on-time shipbuilding and vessels delivery.
Maritime Institute of Malaysia Centre
for Ocean Law and Policy senior researcher Capt S.T. Rakish said
despite having fat order books, shipyards were impacted by rising cost
of raw materials, especially steel, and shortage of shipyard capacity.
“Ship owners are hoping that
shipyards will continue to look into new innovations and measures to
meet market expectations.
“Demand for new ships far exceeded
the delivery capacity and shipyards are facing a worsening order
backlog,” he told StarBiz.
As a result, prices of vessels have
risen quite substantially in the past four years and shipyards must
expand their building capacity, he added.
The situation is further exacerbated
by the International Maritime Organisation's (IMO) deadline for ship
owners to use double-hull tankers by 2010.
For safer shipping environment, the
IMO has issued the new guidelines for ship owners transporting liquid
Rakish said inadequate building
capacity and rising raw material costs would further inflate the price
of new ships.
The average price of very large crude
carriers, the biggest type of oil tanker, has nearly doubled since
2004 to an all-time high of about US$150mil per vessel now.
In the past four years, the average
price of bulk carriers that move iron ore and coal have increased by
about 50% while prices of other types of ships, including liquefied
natural gas vessels and containerships, have also recorded significant
Most of the new shipbuilding
activities now are dominated by Asian shipyards, led by South Korea,
China and Japan. Asia currently accounts for 85% of the global market.
Escalating steel prices have also
contributed to the spike in the prices of vessels .
Last year, heavy plates used in
shipbuilding rose by US$200 per tonne to almost US$900.
Rakish said delays in shipyard
delivery due to the massive increase in orders had forced ship
builders to build new docks and hire more people.
He said that in 2002, there were
about 21 yards in China and nine in South Korea that were capable of
building vessels larger than 30,000 deadweight tonnes.
“By the end of 2007, the number of
yards has increased to 82 in China and 22 in South Korea. Both
countries accounted for three-quarters of all new orders in 2007.
“According to their order books,
deliveries for 2007 to 2010 are set to increase by 150% and 60% in
China and South Korea respectively,” he added.