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Tuesday, July 07, 2009

China Shipyards 8-Month Order Cancellations Reach 152 Vessels

Tuesday, 07 July 2009

Shipyards in China, the world's second-biggest shipbuilding nation, had 152 orders scrapped in the eight months to May and may face more cancellations because of slumping global trade. Ships equivalent to about 4.39 million metric tons were canceled since October, the China Association of Shipbuilding Industry said in a statement
on its Web site. Of the total, orders for 2.32 million tons, or 55 vessels, were scrapped in the first five months of this year, based on preliminary figures.
"The current trend won't recover in the second half of this year and ship prices will drop further," the association said. Order cancellations will worsen and demand for new vessels will remain weak, it said.
Contracts for new vessels slumped since the third quarter of 2008 as the credit crisis and economic recession prompted shipowners to cancel orders or delay taking deliveries. The World Trade Organization has forecast global trade may shrink the most since World War II this year.
Shipyards in China won 1.18 million tons of vessels in the first five months, 96 percent less than a year earlier, according to the association. Order backlogs dropped 6 percent this year to 192.3 million tons at the end of May and may drop further to 165 million tons by the end of this year, it said.
A total of 1.5 million tons of ships were ordered in the first five months worldwide, 98 percent less than a year ago, according to Clarkson Plc, the world's biggest shipbroker.
"This is just a third of the number of contracts that were reported in a single month in May 2008," Clarkson said in its monthly report.

Source: Bloomberg