rss icon Subscribe
desktop mobile

Could Coronavirus Disruption Offer an Opportunity for China Shipyards?

© Igor Yu. Groshev / Adobe Stock

A decline in the rate of infections in China provides yards with the opportunity to reorganize their delivery schedules to address an approaching output slump, says Maritime Strategies International (MSI)

The welcome news of declining rates of coronavirus infections in China, together with steps already in place and still to come in terms of government intervention, provide the barest glimmer of good news in the dry bulk market.

But the impact on dry bulk shipping has gone much further than demand; the effects on supply have also been significant given that around 65% of the dry bulk orderbook scheduled for delivery this year is being constructed in China. In its latest Dry Bulk Freight Forecaster, MSI reveals that just a single dry bulk vessel was delivered in China in February, out of a total of 24.

"MSI expects significant slippage in dry bulk deliveries this year but over and above technical factors, the current economic turmoil could offer the yards a chance to reorganize the delivery schedule to help address an arguably bigger problem," says MSI Dry Bulk Analyst Will Fray. "The orderbook in China is heavily front-loaded and dry bulk shipbuilding activity in the country will drop off a cliff in 2021 unless the schedule is effectively managed."

Given that three-quarters of the orderbook for 120,000dwt vessels and above is at Chinese yards, MSI believes a significant amount of slippage from the planned Capesize orderbook is inevitable, with just 700,000 dwt delivered on average per month over the next three months.

In comparison, a little over half of the Panamax orderbook for delivery this year is being constructed in China, with most of the remainder in Japan. Chinese shipyards account of 54% of the 2020 Handysize orderbook by deadweight with this orderbook also heavily 'front-loaded' suggesting that significant slippage should be expected.

"In the Capesize sector, the delivery schedule is hugely front-loaded, implying a large number of vessels are almost ready for delivery from China. The outbreak of COVID-19 has so far been far less severe in Japan, and we expect to see less slippage in the sub-Capesize segments," adds Fray. "What remains to be seen is whether shipyards can use the market downturn to manage the flow of tonnage in the face of a low orderbook and weak contracting activity."

Mar 23, 2020

 

Shipbuilding

US Shipyards Forge Ahead Through COVID-19

The 56-foot icebreaking tugboat being built by Blount Boats for N.Y. Power Authority (NYPA). (Photo: Blount Boats)

As the novel coronavirus and its impacts continue to spread across America, U.S. shipbuilders

Crabber Vessel M/V Zenith Delivered

(Photo: Skipsteknisk)

A new crabber vessel has been delivered to JSC Arcticservice and departed Tersan Shipyard in

Future USS Fort Lauderdale Launched at Ingalls

The future USS Fort Lauderdale (LPD 28) was successfully launched at the Huntington Ingalls Industries (HII) Ingalls Division shipyard in Pascagoula, Miss. on March 28. (Photo by Huntington Ingalls Industries/US Navy)

The future USS Fort Lauderdale (LPD 28) was launched at the Huntington Ingalls Industries (HII)

Bulk Carriers

TFG Marine Names New CEO

Trafigura's marine fuels joint venture TFG Marine said on Wednesday that Anders Gronborg had been appointed as its chief executive to oversee expansion efforts.

New CEO Takes Over at Pan Ocean

South Korean shipping company Pan Ocean announced that Joong Ho Ahn is newly appointed as a Chief Executive Officer with effect from the date of the Board of Directors Meeting on

Transnet to Cut Transport of Non-Essential Cargo During Lockdown

© OscarDiMalva /Adobe Stock

South Africa's logistics firm Transnet said it would reduce transport services and non-essential

Maritime Apps