STX cancels newbuilding order

STX Shipbuilding has cancelled a 220.7 billion won ($212 million) contract for two bulk carriers after the European customer failed to make the initial payment. The contract was signed in November last year for four 181,000 dwt bulk carriers due for delivery by June 2010. The shipyard is in talks with another shipping company in Europe to fill the slot left open with the cancellation.

The cancellation comes amid concerns that the mortgage subprime crisis and slowing economic growth worldwide may prompt shipping lines to order fewer vessels. Cosco Corp. Singapore, the shipbuilding unit of China’s biggest shipping line, in April scrapped a $202 million rig order after Norwegian customer Red Flag A.S. failed to pay a deposit for the construction to proceed.

Meanwhile, STX has received a 108.8 billion won contract to build two 51,000 dwt chemical carriers for a European client it didn’t name.