The "inventory building" mode of Chinese shipyards has become one of the important reasons for the serious oversupply of offshore shipbuilding (OSV) market.
Citibank recently said that considering the current low oil price environment of weak demand, oversupply problems, offshore ship builders should abandon the current "build-to-stock" business model.
According to Citibank, part of the reason for the severe oversupply in the offshore support vessel (OSV) market is the "inventory building" model of shipyards, especially in China, where many shipyards use this model to build OSVs.
The "inventory-build" model requires shipyards to build OSVs first and then seal contracts to sell them, hoping for a quick turnaround when operators need OSVs urgently. However, the current slump in oil prices has led to a decline in demand for OSVs, and the massive "inventory building" of OSVs has further deepened the supply glut.
In fact, the three-use work boat market has entered the decline channel since 2009, data statistics show that in 2014, the three-use work boat hand-held orders have dropped to 231, a decrease of 63% compared with 2009. However, the number of hand-held orders in 2015 increased by 33 compared with 2014, the main reason may be related to the "inventory construction" mode, and some ships were still recorded after completion due to the owner's reasons for not receiving them
Hold orders, resulting in the number of handheld orders rising against the trend.
Data show that in the three-use work boat construction market, Chinese ship companies account for a relatively large market share. In terms of the number of new orders received from 2011 to 2015, nine of the top ten shipping companies are in China, among which Fujian Southeast Shipyard, Guangxin Marine Heavy Industry and Guangdong Yuexin Marine Engineering rank the top three in terms of new orders received.
As of the end of March 2016, the total idle PSV and AHTS was close to 1,400, including other offshore support vessels, and the idle mothballing scale has exceeded 1,500. In addition, there are currently more than 500 offshore support vessels under construction, of which 350 will be delivered in 2016, Chinese shipyards have not yet delivered about hundreds of new OSVs, the future offshore ship overcapacity will be further aggravated.
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