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Financial crisis bites hard as 529 shipyards close shop


ShipyardsNo fewer than 529 shipyards have closed shop in the last 16 years, just as about 402 facilities that survived the global financial crisis are currently struggling to survive under the prevailing economic situation.A new Clarkson Research showed that the number of ‘active’ shipyards globally has more than halved since the start of 2009, falling to around 402 as at September 2016.

This indicated that 529 yards have closed shop from about 931 yards that existed in 2009.Besides, Teekay Corporation has also predicted that global shipyard capacity would fall by around 20-30 per cent in the next five years.

According to Teekay, global contracting surged by 78 per cent from 2002 to peak in 2007, with the order book peaking in 2009. With capacity expanding to meet this demand, it stated that the number of active yards skyrocketed, rising by 72 per cent from 2005 to a peak of 931 yards in 2009.

“Since the financial crisis, the shrinking order book has led the number of active yards, ones which have at least one vessel (1,000+ GT) on order, to decline,” it stated.Meanwhile, Clarkson Research said showed that currently, there were 402 active yards, down 57 per cent on the 2009 peak.

“Alongside this drop in the number of active yards, new build output has fallen and this year is projected to stand 34 per cent below its 2010 peak in CGT terms,” it added.

According to the report, from 2005, the number of active Chinese yards grew rapidly, increasing 117 per cent to a peak of 382 yards in 2009. Many of the new yards specialised in the bulk carrier sector. Since then, the number of active Chinese yards has declined by 63 per cent, with almost half of these closures accounted for by ‘small’ yards that had delivered two ships or fewer.

There were just 140 active Chinese yards at the start of September 2016, or around 35 per cent of all active yards globally. The number of active yards in Japan has been more steady, peaking at 71 in 2008, before falling 17 per cent by September 2016, when 59 were reported to have an order book.

An official of Clarkson, Christopher Pearce said: “The number of active yards has more than halved since 2009, with a prominent feature being the exit of many Chinese builders from the scene. With ordering levels likely to remain subdued going forward, some shipyards that do not already have substantial order books may also find remaining active a challenge,”

However, larger Korean yards have mostly remained active. Elsewhere, post-2008, European yards struggled to compete for the more limited number of orders.
By September 2016, 140 fewer European yards were active than back in 2008.

Clarkson Research said that looking ahead, many active yards appear vulnerable, while about 240 currently active shipyards are scheduled to deliver their last units on order by the end of 2017.

Some of these yards may yet receive orders or have deliveries delayed, however, around a quarter of active yards have only a single ship on order, while around 40 per cent are not reported to have taken a contract since 2014. Only 59 builders have deliveries due into 2019 and beyond.

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