China ship spare parts imports and exports have dropped by 11.5% and 29% respectively comparing one year ago. Navigation equipment is main ship export equipment, and is about 12% of total ship exports. Machinery equipment export has dropped 9.8% comparing 2013.
Currency Devaluation
Chinese Currency devaluation will help Chinese makers' export ability. After new building has been benefited from this trend, equipment makers will be the next one to be benefitted. Predicted further devaluation up to 10% in next 12 months, will boom China's export industry.
Shipyards
Ship's new building price firming has pushed many owners to seek 3rd class shipyards for early delivery of their new buildings. We have seen over 80% of Chinese shipyards were under finance trouble in 2013. The recently booming in new building orders will help some of shipyards out of trouble. But the new delivery capacity will delay the recovery of health charter market.
Finance
Chinese banks have become major finance resources for ships being built in China. After traditional European shipping banks are more cautious of offering fresh finance to new projects or clients, Chinese banks are taking this opportunity to expend its shipping finance business. One of largest banks-Chinese IAE Bank has financed nearly usd49bill shipping portfolio and issued about usd40bill refund guarantee.
LNG
Handysize LNG ship between 10,000-30,000 cbm will have a boom time in next five years. After heavy investment in larger LNG sector, the distributor sector will be in shortage for further transport to final users. Especially in developing countries, terminals and FRSU are solving the import issues, further distributing will be depending on small size LNG ships.
Container Ship
Containerships are dominating the demolition market. Approximately 230 vessels were torched in the first quarter of 2014. Of these, roughly 24% were containerships. More scrap deals and further lay-ups are needed before the balance between supply and demand in the liner segment can be restored.
Bulk Carrier
Dry sector is supported by firm iron ore exports from Australia, and China’s iron ore imports in the year to date have firmed 15% y-o-y. Capesize spot rate has been kept over usd25, 000/day, and it is a health level for owner to make investment.
Tanker
Crude tanker is under correction after significant boom in end of 2013 and beginning of 2014 when the charter rate reached the three years high. Fleet growth has slow down at about 1.7% against demand growth of 1.6%. Product tanker demand is about 4.6% against fleet growth of 3.7%, it is much better than crude sector.
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