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The Surge In Orders For Chinese Shipping Companies Remains Under Pressure.

By 2018, the number of Chinese shipping companies has increased significantly compared with last year, but the rise in the yuan and the rising cost of raw materials still weigh heavily on margins.

China shipbuilding industry association, according to data from January and February of this year, the Chinese ship company order quantity achieved 12.3 million deadweight tons, if this trend continues, some ship companies is expected to end years of losses, to turn a profit in 2018.

Before, due to price of the ship and cyclical excess rate is lower than the break-even level, and make the most of the ocean carriers into loss, shipping industry has experienced years of decline period. As the shipping industry has recovered, new orders for new ships have started to grow.

According to the data of VesselsValue, since 2016, the Chinese ship companies received 1064 new ship orders, including the amount of orders in January for 37, more than 11 January 2017 and January 20, 2016. According to clarkson statistics, there were 139 new orders in the world in the first two months of this year, among which 64 were newly signed by Chinese shipyards. Japan signed a new order of 24; South Korea signed a new order of 34. Most of the new orders received by Chinese shipping companies are bulk carriers, followed by oil tankers and container ships.

Greece and China still is a biggest customers in the field of bulk carrier and tanker, they note, iron ore, coal and oil products shipping strong growth in demand, especially demand from Asian importers.

Still, the yuan has risen 9 per cent against the dollar over the past 12 months, and the cost of shipboard steel has risen by an average of 10 per cent, which has brought economic pressure on Chinese shipping companies. In 2017, China's gross domestic product rate hovers around 16%, compared with around 25% in 2016.

State-owned shipping companies such as China shipping group and China shipbuilding are trying to expand into other types of ship, such as cruise ships, chemical tankers and liquefied natural gas carriers, which have higher prices and higher profit margins.

At the moment, shipyards around the world, including China, Japan and South Korea, have yet to recover from the collapse in demand for new ships caused by the decline of the shipping industry in the past three years. The dwindling number of hand-held orders has led the Chinese government to demand consolidation in the shipbuilding industry, with dozens of smaller yards being merged or closed by larger yards.