12 April 2023 (Lloyd's List) - ORDER volumes at Japanese shipyards over the past 12 months have dropped for the first time since 2020, as the recovery in newbuilding markets slows.

The country received export orders amounting to 280 ships totalling 11.7m gross tonnage in the fiscal year ended March 31, 2023, compared with 313 ships and 14.3m gt the previous year, the latest statistics from the Japan Ship Exporters’ Association shows.

The decline comes as ship prices have been elevated by higher demand and shipbuilding costs inflated at a time when the global economic outlook is getting increasingly murky, leading more shipowners with appetite for fresh tonnage to take a wait-and-see approach to the market.

That said, it also comes against a high base from the same period a year ago, during which orders won by Japanese shipbuilders reached six-year highs.

Affection for compatriot yards is still a key factor in Japan’s vessel construction sector. Owners from Japan or with a related interest account for nearly 84% of the full-year order volumes, followed by 8.2% from the Greeks and less than 2% from the Chinese.

In March this year, Japanese yards were contracted to build 23 export ships, or a total of 982,250 gt.

In tonnage terms, that is only about half the level seen during the same period of 2022, although it represents a 25.4% growth month on month.

The changes appear largely in line with movement in the global market, according to data from Clarksons.

Global ship orders in March topped 2.4m cgt, down 49% year on year, yet up 3% from February.

The orders won by Japanese yards last month consist of 21 dry bulkers ranging from handysize to capesize, one liquefied petroleum gas/ammonia carrier and one chemical tanker, according to JSEA.

The deal announced by Ocean Network Express in the middle of the month for 10 methanol/ammonia-ready 13,700 teu containerships with Nihon Shipyard — a joint venture between Imabari Shipbuilding and Japan Marine United — was not included, however.

It is worth noting that shipyards in Japan have not gained newbuilding contracts for seven consecutive years for liquefied natural gas carriers, in a segment now carved up by competitors from South Korea and China.

Imabari Shipbuilding president Satoshi Higaki said earlier this year that his company would need to explore several possibilities, including designing the next-generation green ships, to “survive tough competition with overseas players”.