In March, Japan’s new ship orders from home and abroad increased for the first time after three consecutive months of declines, up 21.2% on year to 1.83 million gross tonnes (GT) or in 49 vessels, according to the data released by Japan Ship Exporters’ Association (JSEA) on April 12. But concerns remain regarding vessel orders in coming months, a JSEA official said.
Japan’s March ship orders were also up 342.3% on month. The official explained that the rise was because those orders that had delayed in negotiations were finally placed by the end of March. “We are not surprised about the rise with expected new orders,” he added.
Over January-March, Japan’s new ship orders approximated 2.78 million GT, or down 24.6% on year. And those in fiscal 2021 (April 2021-March 2022) totaled 14.3 million GT, up 59.8% on year, according to the JSEA data.
The official shared that the recent depreciation of Yen would support Japanese shipbuilders to be more competitive, because payment for vessel exports was mainly in U.S. dollar.
“But it will also push steelmakers’ production costs higher, and it will be shifted to steel material prices such as ship plates,” he said.
As of April 13 morning, Japanese Yen against the U.S dollar was at Yen 125.6, or having weakened from average Yen 114.8 in January and Yen 109.9 in 2021, according to the data from Bank of Japan.
The official added that bans for resource imports from Russia by many countries may reduce demand for vessels and how they will impact the appetite by shipowners for new vessels is concerned.
“Demand for decarbonizing shipping is growing, so shipowners may slow down to place new orders. And we have to monitor the movement very cautiously,” he warned.
A sales official from a shipbuilder in western Japan agreed about remaining uncertainties, though he believed that Japanese shipbuilders would maintain stable operations with rising backlog orders.
“We will be able to consume more steel to deliver ordered vessels on schedule. But steel material prices are expected to rise further, so we will have to lift our vessel offer prices, which may slower the placement of new orders,” he added.
By the end of March, the backlogs held by Japanese shipbuilders approximated 19.01 million GT, up 25.7% on year and 4.6% higher on month, the JSEA data showed.
Japanese Shipbuilders’ Backlogs until FY26
Source: JSEA
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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