Chinas surplus of shipbuilding capacity has probably been
overestimated, the countrys association for the
shipbuilding industry said.
It attributed this to some small
and medium-sized shipbuilders having already been phased
Production of ships ordered
before the financial crisis has contributed to shipping
overcapacity, reducing freight rates while global trade remains
lower than expected.
While the industry is definitely
in surplus, the lack of orders since 2009 has already forced
many companies out of business, Zhang Guanqin,
secretary-general of the China Association of the National
Shipbuilding Industry (Cansi), told the China Securities
Shipbuilding capacity in China
is currently estimated at 70 million deadweight tonnes (dwt),
while key shipbuilders have ship orders for more than 100
million dwt, Zhang said.
But there are two upside
factors, he said, noting that there is limited room for prices
for new ships to fall further, as they have already fallen
below the production cost curve, and growing demand for ships
used by companies conducting offshore oil and gas
Cansis data showed that
China built 35.49 million dwt of ships during the first seven
months of 2012, down 7.7 percent year on year.
New orders fell 50.7 percent year on year to 11.64 million