According to South China Morning Post (SCMP), China shipbuilding industry is in the worst conditions of the last ten years. Domestic Shipbrokers reveal that overcapacity, financing pressure as well as the depressed freight rates are all staggering owners’ interests in ordering new vessels.
“The new capacity increased in the last ordering boom has greatly hindered bulker, tanker and containership shipping market and depressed the freight rates” a Hong Kong shipbroker said. Besides, the economic recession in Europe and America also curbed the demand.
According to Clarkson, Chinese shipyards totally won new orders of 182 ships in the first six months. The number stood at 561 vessels and 2036 vessels separately in the same period of 2011 and 2007. In H1 2012, Chinese shipbuilders secured vessels of 3.0m CGT while the tonnage recorded 32.54m CGT in 2007. Statistics show that 46 out of 180 Chinese shipyards delivered “ZERO” vessels in last year.
The main shipbuilding base in China – Jiangsu Province - has also seen great depression. The shipyards in Jiangsu totally secured orders for 72 vessels in the first five months, 61.7% down year-on-year. Rongsheng Heavy Industry, the biggest private shipbuilder in China, has not won any order in the first half of the year. However it is disclosed that Rongsheng was in negotiation for new orders at present.
Some analyst put forward that about 90% of Chinese shipbuilders have got no orders till now this year and 28% have got none since 2009. Many private shipyards are likely to go bankruptcy or convert to ship repairing for ship scraping business under growing budget pressure.