Shipbuilding in Japan, Korea, China Collapses in Death Spiral of Orders

Friday, November 25, 2016
By Paul Martin

by Wolf Richter
WolfStreet.com
November 24, 2016

“Worse than the one following the Global Financial Crisis.”

New orders received by Chinese shipyards – now infamous for undercutting competitors and sinking into bankruptcy – have plunged 58.5% so far this year through October, compared to last year, according to shipping industry data provider BIMCO, cited by the Nikkei. At South Korean shipyards, which include the three largest in the world, orders have plunged 84.2%; at Japanese shipyards, 90%.

They all focused on large dry-bulk vessels, tankers, and containerships. But this year, orders for tankers globally plunged 80% and for container ships 84%.

Global trade, which collapsed during the Financial Crisis but then recovered in a V-shaped manner, was expected to continue soaring. Instead, it has languished over the past few years. Carriers that transport these goods in dry-bulk vessels, tankers, and container ships, face rampant overcapacity and crushed shipping rates. Smaller ones have sunk. In August, Hanjin, the sixth largest carrier and a formerly too-big-to-fail company in South Korea, was allowed to fail. And they all stopped ordering ships.

The Rest…HERE

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