Newbuilding orders plunge

According to the latest statistics, global shipbuilding industry signed only 193,000 DWT new ship deals in February down by 98.4% year on year reaching merely 1.5% of the single month’s volume in 2004. Among the 7 vessels agreed in February were 2 dry bulk cargo vessels, 2 multi-functional vessels, 2 chemical vessels and 1 Ropax ship. Oil tanker saw no deal in February while container ship received zero order in the past 4 consecutive months. It is said China signed 4 vessels’ deal with the total deadweight of 92,000 tonnes.

Bao Zhangjing the senior analyst with China Shipbuilding Industrial Economic Research Center said “New ship order started to plunge since last Oct, and the gloomy climate is still hovering over the shipbuilding industry at the moment.” Gao Xiaochun with CITIC Group said the Baltic Dry Index a measure of commodity shipping costs, has rebounded to over 2,000 points recently, but BDI is not a direct reflection of dry bulk cargo shipping capacity and its recovery in the short term won’t increase the new ship demand. He said the situation would see no positive change in the H1 of 2009. He added that “I predicted the total new deal would reach 48 million deadweight tons, down by 70%YoY but seems it would be hard to reach even 40 million deadweight tons according to the current situation.”

China Association of the National Shipbuilding Industry pointed out in a report that the global shipbuilding industry would plummet further on the basis of 2008, with the optimistic prediction of 60 million DWT and the pessimistic prediction of 40 million DWT.

Bao Zhangjing said it is significant to notice that the price of new ship has also dropped at the same time. He said that “By the end of February the Clarkson new ship price index posted at 159 points, down 7 points from the previous month with the drop range become wider. He said that many domestic shipbuilders are trying to merge with other small private shipyards.