Chinese Shipyard Orders Plunge
New ship orders at Chinese yards have fallen 68.3 percent to the end of August as tough conditions prevailed in the global shipping market, Global Times reported quoting data from the China Association of the National Shipbuilding Industry (CANSI).
Accoring to experts said the discouraging figure will exacerbate the problems of the country’s struggling shipyards.
CANSI said that due to the slack market, order backlogs and prices for new ships also fell.
China’s shipbuilders completed 14.6 percent more ships by tonnage than a year earlier during the eight months, reducing the order backlog, which was down 12.1 percent at the end of August, CANSI data showed.
The 1,447 medium-sized and large shipbuilders monitored by the association generated aggregate operating income of 414.47 billion yuan ($65.1 billion) from January to July, up 4.2 percent from the same period in 2014. Combined profits fell 22 percent to 11.99 billion yuan.
Experts said the industry’s woes were mainly caused by weak demand in the shipping market, caused by contracting trade.
The cloudy economic picture discouraged shipping firms from placing more orders, said Zhang Yongfeng, a market analyst with the Shanghai International Shipping Institute.
He said that currently most of the orders are for large vessels, such as 20,000-TEU (20-foot equivalent unit) container ships. Smaller vessels are disappearing and that means only leading shipbuilders can secure orders.
Smaller shipping companies face financing difficulties even if they want to place orders, Zheng said.