Medium and small size Chinese shipyards to face stiff challenge

It is reported that large sized shipyards will surely benefit from the revitalization plan of shipbuilding industry in China. By comparison, medium and small size ones are likely to be washed out firstly amid the sluggish market. Reporters from Shanghai Securities News learnt that medium and small size shipyards in Zhejiang, Fujian and Guangdong had met with stiff challenge for the financial turmoil since last September. As a matter of fact, many owners were so pessimistic about the economic situation in this year that they even mulled to shut down their private owned shipyards.
Take Zhejiang province as a benchmark, according to the present statistics, overcapacity emerges among the shipbuilding facilities for vessels that can carry up below 50,000 tonnes and the monthly rent of vessels with a capacity of 20,000 tonnes tumbles from CNY 0.5 million to CNY 0.6 million to tens of thousands yuan. In addition, non-stop orders cancellation or vessel delivery delay came out since the industry fallback.
The ordered 34 vessels with a total volume of 0.7202 million DWT had been cancelled by end 2008, 18 of which were originally to be exported abroad, taking up 52.9%.
Related person in Fujian province said "There is no ship order since the second half of 2008, especially for Q4. Further more, delay of ship delivery becomes normal for the ship owners' high demand. Thus, shipyards lacks of cash flow. The person added that bulk cargo ship takes up 75.84% of the orders in Zhejiang province, much higher than the whole country's 64.1%, while, the proportion of its oil tanker and container ship is relatively low. For another thing, the proportions of all kinds of ordered ships in Zhejiang province do not harmonize with its shipbuilding facilities capacity, all of that weigh on the medium and small sized shipyards there.”
Currently, Zhejiang province holds a total ship order of 25.55 million tonnes apparently, which can support the shipyards running for three years. However, the orders for mid and small sized vessels, which are suitable for the province, are actually not enough. "According to the statistics, orders for vessels with a capacity above 50,000 tonnes account for 66.5% of the total orders and that with a capacity below 50,000 tonnes only account for 33.5%."
Expert figured that "The shipbuilding capacity of Zhejiang's shipyards is mainly based on that below 50,000 tonnes. Besides, the orders for that kind of ships only take up 1/3 of the total orders. Hence, there is no doubt that medium and small-size shipyards will hardly to weather through the winter if the market remains to be weak without enough orders."