China to face shipyard glut from 2011: govt official

China, the world's second- biggest shipbuilding nation, will face a capacity glut from 2011 after yards work through existing orders and shipping lines slow new orders, according to a government official. Insufficient demand will be a 'major problem' for as long as three more years, Zhu Hongren, the Ministry of Industry and Information Technology's chief engineer, said yesterday at a conference here.
Global shipbuilding capacity will rise to 200 million deadweight tons annually in the next few years, while demand will struggle to reach the 156 million tons it averaged over the past six years, Mr Zhu said.
China plans to announce new rules to encourage shipbuilding mergers before the end of the year to pare growth in the industry. By 2015, China's 10 biggest shipbuilders will account for more than 70 per cent of all vessels built in the nation, rising from 53 per cent last year, Mr Zhu said.
China will also help shipyards access credit and encourage shipping lines to replace older vessels to help the shipbuilding industry, he said.