Shipyards in Japan and South Korea that are using Chinese-made equipment and steel plates are feeling the effects of the outbreak of coronavirus — named Covid-19 by the World Health Organization.
One Japanese shipyard executive told TradeWinds that his company has notified shipowners they may face some delay in delivery of newbuildings as the “supply chain” in China has been disrupted by the closure of Chinese plants and factories.
“We already faced two weeks' delay in receiving steel plates from Chinese steel mills as they were closed for operation under the government’s instruction,” he said. “Some Chinese equipment suppliers, such as scrubber makers, have also declared force majeure…. we are monitoring the situation in China very closely.”
Shipbuilding observers believe yards such as Samsung Heavy Industries and DSME will be impacted more by coronavirus — named Covid-19 by the World Health Organization — since large numbers of their ships’ hull blocks are imported from their affiliate shipyards — SHI Ningbo and DSME Shandong, respectively, in China.
But a SHI spokesman said: “The blocks supplied from Ningbo shipyard to Geoje are no more than 200,000 tonnes per year and shipbuilding generally requires a long production period. As most of the blocks produced at Ningbo are composed of parts that barely affect delivery schedule, we expect the impact by temporary closure will be limited.
Contingency plans
“Thus, the expected disruption to production following the temporary closure of Ningbo shipyard can be fully controlled by SHI’s careful process management and we also have contingency plans in case the situation is prolonged.”
Beijing gave the green light to plants and factories to resume operations on Monday. But several shipbuilding companies in Jiangsu and Zhejiang province, including SHI Ningbo, remain closed.
“To resume operation, there are conditions that we have to meet,” a shipyard official in Jiangsu province said.
“One of them is if there is any outbreak of the virus in the shipyard, the company has to bear responsibility for it. Thus, as a precaution, we are not resuming work for an indefinite period.”
A shipyard executive in Zhejiang added: “Many of the yard workers are migrant workers and some of their hometown or provinces are locked down and they could not travel.”
Over in Shanghai, state-owned Jiangnan Shipyard and Hudong-Zhonghua Shipbuilding have restarted production. However, less than 50% of the workforce is back at work.
“Shipyard workers that are not from Shanghai need to spend 14 days in quarantine before they can return back to work,” a shipyard source said. “Many of the yard workers are migrant workers and some of their hometown or provinces are in lockdown and they could not travel.
“We also face difficulty in conducting sea trials since some of the equipment engineers are foreigners and they are not travelling to China.”
In its fourth-quarter financial report, Oslo-listed 2020 Bulkers revealed that the company may face a delay in taking delivery of two newcastlemax bulker newbuildings from New Times Shipbuilding as the shipyard has announced force majeure due to the outbreak of the coronavirus.
“Workers are still not coming back to their positions due to the coronavirus,” he said. “It is not known when they will resume work and when the two vessels will be completed.”
