As many as 50 per cent of commodity carriers on order at yards worldwide may never be built after 56 per cent of new dry-bulk vessels didn't enter service in January as scheduled, according to Genco Shipping & Trading Ltd.
Any contracts for ships signed in 2007 or 2008 that have been deferred or remain incomplete probably will be cancelled, Genco chairman Peter Georgiopoulos said in a teleconference with analysts.
Companies will jettison deals because ship prices have fallen since then, so orders 'will continue to disappear', according to Mr Georgiopoulus.
'They're better off losing their deposits and to go and order a new one at a cheaper price, so I think those ships are not coming,' he said.
While it's difficult to be precise about the number of likely cancellations, estimates of 40 per cent to 50 per cent are 'probably not a bad guess', he said.
There were 2,387 dry-bulk vessels contracted at Asian shipyards, which built about 86 per cent of the world's ships in 2011, according to a Dec 31 tally by Clarkson plc, the largest shipbroker.
The list of bulk carriers to be built is probably overstated, Golden Ocean Group Ltd said in August.
Cancelled orders from 2007 and 2008, before a plunge in hiring rates, haven't been removed from the total, according to a presentation from the shipping line, led by Norway-born billionaire John Fredriksen.
New York-based Genco said last July that delays or non-deliveries of dry-bulk carriers would increase to 35 to 40 per cent in 2011, curbing an oversupply of new vessels that's weighing on rates.
The non-delivery of vessels because of contract cancellations or delays peaked at 51 per cent in 2009, and were at 44 per cent in 2010, according to Det Norske Veritas. The Oslo-based company monitors compliance with ship designs and structural rules.
Prices of new ships carrying dry-bulk commodities slid to an eight-year low this month, down by 52 per cent from an August 2008 peak, as orders reached the lowest level since 2006, according to Clarkson.
Genco, which reported net income of US$25.4 million for the 12 months ending Dec 31 on Wednesday, controls a dry-bulk fleet of 53 vessels.