[BITList] Fwd: Lloyd's List: Send to Colleague

[Michael Feltham]

An editorial from Lloyds List

Mike
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Begin forwarded message:

From: enquiries at lloydslist.com
Date: 13 November 2008 07:46:28 GMT
To: mj.feltham at madasafish.com
Subject: Lloyd's List: Send to Colleague


The below article was sent to you from Mike Feltham (mj.feltham at madasafish.com 
) with the following message: I thought you might be interested in the  
article below.


Too little, too late

CHINA’s announcement last week that it was to stop issuing licences  
for new shipyards was a classic case of slamming the stable door shut  
after the horse has bolted.

Over the past couple of years, it has seemed that anyone with a bit of  
waterfront land or swamp could overnight claim to be a shipbuilder.  
Experience was not apparently an issue for either for the Chinese  
authorities or the new yards’ potential customers.

Brownfield yards, whose owners had never built a ship in their lives,  
were able to market newbuildings to shipowners desperate for their  
slice of the shipping boom. The deposits they received were then used  
to start building the yard.

The move by the Chinese authorities to stop new licenses is unlikely  
to make much difference as the problem has already been created, with  
new yards of uncertain quality and experience now facing the added  
pressures of the global credit crunch.

With China having more than 200m dwt, or around 35% of the global  
shipbuilding orderbook, what happens to these yards now is a key  
question, in particular for the dry bulk shipping market in terms of  
demand and supply.

With major shipyards only interested in building bigger, more complex  
and expensive vessels, it was the brownfield yards that were chosen in  
particular for smaller bulk carriers in the handy range.

However, even fairly widespread cancellations in the smaller-sized dry  
bulk newbuilding orders, either due to yards simply never getting off  
the ground or shipowners having no finance, are unlikely to have a  
major impact on the overall demand and supply balance of the dry bulk  
fleet.

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