- Strong Sep deliveries provide support to steelmakers
- Japanese shipyards secure orders for 19 vessels
Mysteel Global: Japan’s shipbuilding sector saw a weak first half of the fiscal year, despite a short-term boost in Sept. Data from Japan Ship Exporters’ Association (JSEA) shows that Japanese shipbuilders received orders for 19 vessels totaling 687,470 gross tons (GT) last month. This was double the seven vessels (337,800 GT) recorded in the same month a year earlier and twice the Aug figure of 371,580 GT.
But the Sept rebound could not make up for the overall slowdown between Apr and Sept. Total orders in the first half of the fiscal year fell to 4.32 million GT across 93 vessels, down 35.7% in tonnage and 40% in vessel count compared with 155 ships ordered in the same period last year. This marks the first decline in two years.
Last year’s strong figures were boosted by a rush of orders before new international cybersecurity regulations came into effect in Jul’23. Even compared with H1FY’23, the current order volume of 4.32 million GT is lower than 4.54 million GT, indicating a likely weak full-year performance.
While JSEA did not specify a reason for the drop, Nikkei reported that labor shortages at domestic shipyards are limiting their ability to take on new projects. Japanese builders are focusing on high-margin orders, leaving lower-value contracts to competitors in China and South Korea. Still, the shipyards maintain a strong backlog of 29.27 million GT in 609 ships, enough to keep them busy for about 3.5 years.
On a positive note, vessel deliveries increased in September to 20 ships totaling 791,080 GT, up 1% y-o-y and 15% from Aug. This benefits steel suppliers: Japan Iron & Steel Federation reported 251,000 tonnes of steel orders from the shipbuilding sector in Jul, up 6.1% from Jun. For Apr-Jun, steel orders reached 964,000 tonnes, nearly unchanged from a year earlier.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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