Donnerstag, 9. April 2009

Commercial Shipping: Update

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


  1. Maybe that's a cheap new way to see the world: Rent an empty container on a container ship...

  2. Darf man hier eigentlich auch auf Deutsch kommentieren, oder muß es Englisch sein?

  3. That is bad news for the shipping industry. On the other hand, China is far from being alone in helping out the shipyards. Germany helped out Lindau Werft with a political credit by HSH Nordbank, too.

    Obviously maintaining the ship building overcapacity will further depress ship prices and in turn charter rates. Also, I somewhere read that nearly no shipping liner manages to cancel orders without unacceptable fines. Thus, many of the unwanted ships will be built unless the buyer gets bankrupt.

  4. @ketzerisch:

    HSH Nordbank again, huh? Shipping finance is such a wonderful business to be in right now, I'm sure the bank has a great future...

    From what I know, you're right: Cancellations are frequently tricky due to contractual fines. But I think there is every reason to believe that lots of shipping lines will indeed go bankrupt during the next few years. Unless there is a sudden miraculous recovery in trade flows...

  5. @anonym

    Kommentare werden in jeder beliebigen Sprache akzeptiert. Ich kann aber nicht garantieren, daß ich auf Arabische oder Japanische Kommentare auch antworten werde...

  6. The shipbuilding industry could be 1.5% of the Chinese GDP.
    So,the fall could be a big cut .

    But from the other side, the infrastructure /investment into the new ports/shipbuilding docks could be in a simmilar magnitude.

    And it is just a small potion of the full Chinese ecconomy.But I think it show well the general conditions...