January ship orders were also down 15.9% on month, and the official explained that the negotiation has been prolonged due to higher production costs – mainly steel materials, so shipbuilders are trying to shift the rise in vessel prices and to wait for buyers to agree on higher prices.
“But we don’t worry much about the decline for now, as more orders will be placed soon as vessel prices may increase further with the expected rise in material prices. And recent weakened Japanese Yen is also supporting Japanese shipbuilders to improve their price competitiveness,” the official said.
He shared that the exact ship plate price negotiated by each shipbuilder remains undisclosed, but he heard from some shipbuilders that the plate price they are currently receiving is about Yen 25,000-35,000/tonne ($216-303/t) higher than about six months ago, and ship plate prices are expected to rise another Yen 10,000-20,000/t since April.
A sales official from a shipbuilder in western Japan shared that most Japanese shipbuilders are holding more backlog orders and are ramping up production to deliver vessels on time.
“We’ll continue to consume more higher-priced plates as demand for vessels is expected to stay firm. And customers will have to agree on higher vessel prices,” he predicted.
By the end of January, the backlogs held by Japanese shipbuilders approximated 18.49 million GT, up 25.4% on year but down 1.1% on month, the JSEA data showed.
Japanese Shipbuilders’ Backlogs until FY25
The latest forecast by Japan’s Ministry of Economy, Trade and Industry suggested that carbon steel demand from Japanese shipbuilders during the current quarter will reach around 860,000 tonnes, up 13.9% on year and 9.1% higher on quarter, among which 90% are plates, Mysteel Global noted.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an exchange agreement between MySteel Global and SteelMint.
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