China Shipbuilder Orders Fell 95% in First 4 Months

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Friday, 15 May 2009

New orders placed with China’s shipyards fell 95 percent during the first four months of this year, the Ministry of Industry and Information Technology said. Orders from January to April dropped to 990,000 deadweight tons , the ministry said on its Web site. New orders last month reached 200,000 deadweight tons, taking total order books to 195 million deadweight tons at the end of April, 7 percent higher than a year earlier, it said.
China CSSC Holdings Ltd. and Guangzhou Shipyard International Co., units of the country’s biggest builder of vessels, both posted declines in first-quarter profit as orders dried up and they worked through high-priced steel inventories. Slower order flow also increased financing costs for Guangzhou Shipyard, the company said in an April 9 statement.
The yards completed 9.54 million deadweight tons of vessels this year, the ministry said.
China CSSC fell 2.2 percent in Shanghai trading to 60.58 yuan as of the exchange’s 11:30 a.m. break. Guangzhou Shipyard slid 4.3 percent to HK$11.26 in Hong Kong trading as of 12:11 p.m. and has gained 58 percent this year, compared with a 15 percent increase in the benchmark Hang Seng Index. Both companies are units of state-run China State Shipbuilding Corp.
Chinese shipyards may have cash shortages of about $30 billion in the next three to four years, the China Daily reported on April 8, citing Li Li, a deputy general manager of Export-Import Bank of China’s ship finance department.
Source: Bloomberg