China hit by large number of cancellations

According to local newspaper reports, China Academy of Telecommunication Research (CATR) of the Ministry of Information Industry (MII), the main agency in charge of industrial and information communication in China, disclosed late March that the number of newbuildings cancelled in China from October 2008 through February 2009 reached 110 units of 2.74 million dwt.

CATR, however, admits that the statistics are incomplete and it is highly probable that the actual volume of cancelled ship orders significantly surpassed the figures obtained by the government. CATR claims that the number of ships cancelled during the period under review is equivalent to about 1.4% of the total workload at Chinese shipyards.

Of the volume, 13 ships of 660,000 dwt were cancelled in January-February 2009.

However, local media reports claim that in bulker sector alone, 197 ships aggregating about 19.66 million dwt were already cancelled in China as of the end of 2008.

Furthermore, according to a local informed source, it is believed that newbuilding cancellations, including withdrawn letters of intent (LI), have been quite huge with actual number of cancelled newbuildings presumably exceeding the government tally by a wide margin.

CATR also announced that newbuilding completions by Chinese builders in January-March 2009 increased by 45.5% year-on-year to 6.36 million dwt, with the yards’ combined backlog standing at 199.34 million dwt as of the end of March.