Shipbuilding Capacity at the Opening of a New Decade – Where Are We?

By Worldyards

We at Worldyards pride ourselves in having relatively accurate (yes, everything is relative) measures on both shipbuilding capacity and size of the orderbook, therefore we think it is appropriate to end 2009 with our final public market comment on capacity. We discussed this issue in numerous occasions in the past (see, Reality Check – 3 years on dated 18 March 2008), at most times throwing cold water into various supply-side scares such as massive delays, lack of main engine and crankshafts etc.. We do naturally track the numerous delays and failures of some shipyards before they cut the first steel. Such misfires have been part and parcel of the shipbuilding landscape for many years. Our capacity figures represent fact-based tracking of all expansions and productivity increases. These measures to record shipyard facility capacity are combined with a detailed tracking of orderbook progress to indentify instances where the contracted orderbook will fall short of projections due to either shipbuilder default (construction delays) or else buyer problems (that result in either outright default on contract or a hard-fought-for mutual agreement to terminate or reschedule). Continue Reading

Government Responses

Lately, many governments in Asia have come up with plans to lend a helping hand to the shipping or shipbuilding industry – sectors that they consider to pivotal to their country’s economic well being. In February, the Chinese State Council has approved a stimulus package for the domestic shipbuilders – largely aimed at stabilizing the orderbooks, reducing operating risks and regulating capacity of the shipbuilders. The plan has outlined six policies as summarised below:

1. Stablise shipbuilders’ orderbooks: By providing more financial support to shipowners, encouraging large shipping companies to adhere to their newbuilding delivery schedules and introducing policies to expedite vessel replacements Continue Reading