More shipyards may shut down this year

Shipyards. PHOTO: jmlshipyards.com

. 62% of vessel builders worldwide quit
The wave of challenges bedevilling the shipping sector appears unabated, as it is feared that about 30 per cent of the surviving shipyards may also go down before the end of this year.

Already, about 62 per cent of the shipyards worldwide have sunk due to sluggish demand in the past nine years, according to a from shipping and shipbuilding market analysis firm, Clarkson Research.

The firm said: “There were a total of 934 “active” shipyards globally in 2009. At that time, many firms scrambled to build shipyards to meet the demand in the peak of the shipbuilding cycle from 2007 to 2008. This number has now dropped by 62 per cent to stand at 358 yards as of start July 2017, the lowest number of active yards for many years.”

The research firm also warned that the remaining yards would have to struggle to survive, saying: “30 per cent of the remaining yards will be out of work by the end of this year. The number of shipyards will continuously decrease for a while.”

The projections were corroborated by the Vessels Value figures, which said that the number of new building orders dropped during the first half (H1) of 2017. It noted that although the new building orders for tanker and bulkers have increased during the period, but the overall number of orders placed has more than halved when compared to the same period in 2015.

“This is especially obvious when comparing the 50 offshore vessels ordered in H1 2015, versus the absence of any offshore orders placed during the first half of 2017,” Associate Director, Vessels Value, Claudia Norrgren, told The Guardian.

In 2013 alone, the number of new build vessel orders reached 3,048 in the global shipbuilding market. However, the figure dropped 80 per cent to 573 last year. There were 321 orders placed in H1, which analysts believe the market is now in the stage of recovery after hitting the bottom.

Major shipbuilders were reported to have recorded the lowest number of orders placed. Hyundai Heavy Industries Co. saw its backlog orders drop from $51.96 billion in 2013, to $24.02 billion as of June this year. Daewoo Shipbuilding & Marine Engineering Co. also had backlog orders worth $52.32 billion three years ago but the figure declined to $27.68 billion now. Samsung Heavy Industries Co. also has backlog orders worth $21.43 billion.

“Shipbuilders, which have no orders placed, are shutting down their docks. Hyundai Heavy has closed two docks last year and one this year. Daewoo Shipbuilding, which has suffered from financial difficulties, sold two floating docks. Samsung Heavy Industries also shut down two docks.

Daewoo Shipbuilding is planning to sell additional one or two docks in the second half of this year and Hyundai Heavy is also considering the shutdown of additional docks,” Vessels Value stated.

Meanwhile, another research firm, Drewry, said mergers and acquisitions activities in the port sector are at a high level. About $3.1 billion worth of deals have been struck so far in 2017. In the last year, more than half of the acquisitions by global/international terminal operators have been made by Chinese players.



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