Chinese builders face a chain-reaction bankruptcy due to troubled newbuilding commercial ship market and following decrease in new order this year.
According to Economic Information on 30 November, among 24 yards located in shipbuilding industrial complex in Changjiang Delta, Zhejiang, about half of them have stopped operation.
Chinese shipbuilders' new order stands at 29.75m dwt in the first ten months, down by 45.5% on the same period in 2010. October recorded the lowest new order of 730,000 dwt this year, in particular.
Meanwhile, 2010 recorded a total of 75.23m-dwt new order and monthly average of 6.27m dwt.
Even though China has made a quantitative growth with the help of the government, it still has not narrowed the technical gap between Korea in high-value vessels like large containership, LNG carrier, drillship, etc.
Market forecast that Chinese builders would have another troubled year with decreasing new order and low newbuilding price, surging costs, etc., in 2012.
Also, overall shipbuilding facilities in the world being saturated at present, yearly new order just halves capacity. And about 40% of Chinese small-and-medium sized yards are in concern about going bankruptcy.