Tuesday, November 27, 2012

[Ship Building] Chinese Dismal 2013

Chinese Dismal 2013

Shipbuilding and its related industries in China is expected to suffer another year in 2013.

China-based Union bank of Switzerland (UBS) forecasted that increase in tonnage supply will slow down from 2013, however, due to oversupplied tonnages, 2013 will still see poor newbuilding order activity.

During the first nine months of this year, amid depressed global economy, total amount of orders contracted declined by 44% in dwt terms. UBS prospected overall global order will see a decline by 48% on an annualized basis.

Also, exiting small-and-medium shipyards will grow, while heavy-tail payment structure will aggravate shipbuilders' financial problems.

Moreover, under fierce competition for new order, some of shipyards started to offer newbuilding prices even lower than production cost. USB said that many of Chinese shipyards secure less than 1.6 years of orderbook schedule and more domestic small-and-medium sized shipyards will be weeded out.

UBS said that offshore segment will see steady orders over the next couple of years, adding that new order for LNG carrier has massively increased since 2011.

Published : November 26, 2012

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