Chinese shipbuilders lobby Beijing

With new orders for China’s shipbuilding industry estimated to be halved in 2009, experts are calling for the Chinese government to quickly pass the shipbuilding industry stimulus plan. China Association of National Shipbuilding Industry (CANSI) estimates the country’s new shipbuilding orders in 2009 may decline to between 20 and 30 million DWT, against 58.18 million DWT in 2008, when orders slumped 40.9% from a year earlier.

The industry, faced with cancellation of orders, deferred delivery and severe overcapacity, is in urgent need of a bailout from the government, said experts.

“Confidence is dearer than gold. With the support of the government, China’s shipbuilding industry can surely summon up the confidence and turn the crisis into opportunities,” said an official with CANSI.

The association predicts shipbuilding completion in 2009 will fall to 40 million DWT and orderbook may drop to 160 million DWT by end-2009. Meanwhile, the global new orders are projected to shrink to between 40 and 60 million DWT. China’s shipbuilding-boosting plan, initiated by the National Development and Reform Commission (NDRC), has been submitted to the State Council, or the cabinet for approval. Contained in the plan are plans to reduce the mandatory age for scrapping ships on the mainland.

China’s shipbuilding industry built 28.81 million DWT in 2008, up 52.2% on year, but new orders fell 40.9% to 58.18 million tons. The orderbook amounted to 204.60 million DWT by end of 2008, up 28.7% from the previous year.

The Chinese shipbuilding industry has a combined production capacity of 28.81 million DWT, accounting for 29.5% of the world’s total, according to figures from the Ministry of Industry and Information Technology. China has overtaken Japan as the world’s second largest shipbuilder after South Korea, according to London-based Clarkson Research Studies.