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New orders at China shipyards plunge 68% in first eight months

New orders at China shipyards plunge 68% in first eight months
The lingering overcapacity in the global shipping market has led to the expected and continuing fall in newbuilding orders received at Chinese shipyards in the first eight months of this year, according to figures from China Association of the National Shipbuilding Industry (Cansi).

From January to August 2015, China’s shipbuilders won 15.05m dwt in new order vessel tonnage, representing a sharp 68.3% plunge compared to the previous corresponding period. New shipbuilding contracts placed by foreign owners were at 12.91m dwt, down 71.1% year-on-year.

In the same period, Chinese shipyards completed new vessel capacity of 25.31m dwt, an increase of 14.6% over the same period of last year, Cansi figures showed.

As at the end of August 2015, the shipbuilders sat on an orderbook of 135.14m dwt, a decrease of 12.1% year-on-year and down 9.5% compared to the end of 2014.

Cansi also monitors the production from China’s 54 leading shipyards, where figures pointed to new orders received totalling 13.67m dwt in the first eight months, plummeting 70% year-on-year.

The 54 leading yards completed a combined vessel tonnage of 23.41m dwt and boasted an orderbook backlog of 132.83m dwt at the end of August.

On a slightly wider scale, Cansi also looks at 88 main Chinese yards, which produced a combined vessel tonnage valued at RMB275bn ($43.18bn), an increase of 4.3% year-on-year. Shipbuilding accounted for RMB132bn of the total, while equipment and ship repair took up RMB22bn and RMB8.6bn respectively.

The 88 main yards also generated a combined revenue of RMB189bn in the first eight months, an improvement of 4.9%. Profit, however, dipped by 14.2% to RMB2.9bn due mainly to lower newbuilding prices and higher operation costs.