China's shipbuilding industry has shown increasing reliance on export market in recent years since ship plate export volume is on the rise. In the first quarter of 2008, domestic shipbuilding plate market has witnessed soaring output and price despite the severe snowstorm.

Obviously, East Asia is in the spotlight among the new round of global shipbuilding boom starting from 2002. As a result, China's thriving shipbuilding sector has stimulated furious investment in ship plate capacity expansion over the years. By contrary, the ship plate capacity in traditional shipbuilding titans like Japan, South Korea has lagged behind the demand growth, leading to massive supply shortfall.

China's ship plate fresh capacity has started to come on stream from 2004, with a host of leading steel mills being classified by global leading classification societies. That help Chinese ship plate make inroads into overseas market.

In 2007, China exports 4 million tonnes of ship plate, representing 35% of its total ship plate output of 12 million tonnes, far exceeding the country's overall steel export ratio of 11%. The ship plate output growth has continued to steam ahead in Q1 of 2008, with monthly production keeps expanding at over 100%. The ship plate output amounts to 4.72 million tonnes in January to March 2008, up by 120% YoY.

In the mean time, the shipbuilding industry has shown healthy growth in Southeast Asia. China has delivered 2.1 million DWT of vessels in the first two months of 2008, with the ratio of the global ship production down from last year's 22.2% to 21.9%. And Japan has lifted its share from 33.17% to 33.3%, South Korea remains to take up 34.4% in the timeframe. Vietnam has also seen booming shipbuilding sector in recent years. Vinashin, the bellwether of the country's shipbuilding company, has recorded historical high of output in the first quarter.

The robust demand for ship plate in above shipbuilding countries has afforded great opportunity for Chinese medium plate export, which has surged 61% in the first quarter against 19% decline on overall steel export. South Korea, Vietnam and Singapore are the top three destinations, accounting for 78% of Chinese medium plate shipment.

Meanwhile, Chinese mills have settled the export price to South Korea for June 2008 delivery at USD 1200 to USD 1300 per tonne CNF in late April 2008. Currently, the EXW price of most domestic ship plate producers is below that level. Therefore, Baosteel is set to lift its Q3 price for ship plate well above CNY 8000 per tonne, which could give further boost to domestic ship plate market.

(Sourced from MySteel.net)