According to Bloomberg, China will bail out its ailing state-owned shipyards by directing state-owned shipping lines to pick up orders cancelled or otherwise abandoned by international buyers.
Apparently, worldwide orders for commercial vessels are down 95 % year-on-year in March, with a total order volume of just 9 ships being placed worldwide.
Meanwhile, Chinese shipyards alone had 110 cancellations in the 5 months from October to February, and it is expected that 60 % of remaining orders will be cancelled this year or next.
China Daily is running a similar article:
New orders placed with Chinese shipyards in Q1 are down 98.3 % year-on-year (orders at all shipyards worldwide are "only" down 97 %).
The China Shipbuilding Research center expects the "global shipbuilding depression" to possibly last "even more than 5 years".
And China Import-Export Bank has extended fresh credit lines of 160 bn RMB (17 bn €) to China's two largest shipyards (both state-owned). Sounds like lots of bad loans in the making...
Last but not least, the FT offers data on worldwide container shipping (from yesterday's print edition, therefore no link):
- According to analysts, the industry (i.e. all container shipping lines worldwide) is estimated to post 2009 losses of 32 bn $ (!)
- Placed orders for new container vessels amount to 49 % of the existing capacity- According to market forcasts, roughly 40 % of orders are expected to be cancelled, the rest is being built.
- Cosco (China) has outstanding orders of 89 % of capacity, Hanjin (Korea) of 72 %, and some smaller lines have >100 %.
The CEO of Neptune Orient Lines is quoted as saying: "I have no idea what in the world they (-> lines with large order books) have in mind. What would you do with that number of ships?"
See also this earlier post on this blog:The container shipping disaster