Ship orders crash

Global ship orders tumbled 90% last month as the credit crunch damped world trade and made it harder for shipping lines to borrow money, according to Lloyd’s Register. Shipowners ordered a total of 37 container ships, tankers and other vessels in October, compared with 378 a year earlier, LR’s Chief Executive Officer Richard Sadler said.

Hyundai Heavy Industries has also reported declining orders for the three months through September as shipping lines are slowing expansion plans because of a lack of financing and plunging demand for shipments of oil, raw materials and finished goods. The global full-year order tally will likely fall more than the 15% previously predicted by LR, Sadler said. “We underestimated it,” he added. “On the positive side, compared to 2006, 2007 was an exceptional year.”

Contracts last year surged 50% to 261.3 million deadweight tonnes, according to shipbrokers Clarkson. In the first nine months of this year, orders dropped 27% to 142.9 million deadweight tonnes. The slowdown means that some shipyards haven’t taken an order since the first week of September, Sadler said.

New contracts in China dropped 62% to 24.35 million gross tons in the first ten months, he added. New orders in Korea fell 50% to 33.68 million gross tonnes.

Ship orders surged last year as China’s economic growth boosted demand for imports of iron ore for steel making. The country’s export growth also fueled demand for container ships to carry furniture, toys and other goods to the US and Europe.

The Baltic Dry Index surged to a record 11,793 on 20 May, having more than tripled in three years. Rates have since tumbled 93%, to near six- year lows, as traders are struggling to get credit for shipments.