New vessel orders jump 71% in Q1

New orders at Chinese shipyards saw a 71-percent surge from a year ago during the first quarter, according to the China Association of the National Shipbuilding Industry.

New orders at Chinese shipyards stood at 9.57 million deadweight tons, according to the association. During the same period, the volume of finished vessels declined by 16 percent from a year earlier to 9.45 million deadweight tons while orders in hand dropped by 25 percent to 107 million deadweight tons.

But analysts don't think the increase in new orders means an industry recovery. They believe many shipping companies are placing their orders at a time when shipbuilding costs are at their lowest for years.

"It takes about two years to build a ship. So if you place orders now, you will be able to use the new ships in two years when a market recovery is expected," a market source said.

The association predicts the shipping industry will see a moderate recovery from a year ago. But the difficult market conditions are likely to persist for another couple of years, it said.