Chinese shipyards loosing steam

According to a report issued by China Association of the National Shipbuilding Industry (CANSI), China’s shipyards continue to scrape along with continuing declines in new business and growing risk of cancelled orders. The industry began losing steam in the second half of 2008 and business in the first four months of this year has also ebbed. New orders placed with 70 key shipyards in China decreased by 96%YoY to 640,000 deadweight tonnes.

The report said order cancellations have spread to more yards. From January to end of April, vessels totalling 1.15 million DWT were cancelled, almost twice the number of new orders in the same period. Zhang Guangqin president of CANSI said “The gloomy situation will last for a long time. He said that: “Currently I haven’t seen many signs indicating recovery of the shipping industry. I guess shipbuilding will not recover until two to three years later.”

Zhang said the situation at private shipyards is no better than at State-owned enterprises. Among the vessels cancelled during the first four months, two thirds or 50% of total tonnage hit private companies. The report by CANSI forecast that demand for oil tankers, container ships and bulk cargo carriers will remain very low during the next several months.