Bulker newbuilding cancellations hit 10% of orderbook

Norwegian classification society Det Norske Veritas, in its latest research estimates that 492 vessels, or 37.2m dwt, have been removed from the orderbook.
This figure includes 325 bulk carriers of around 28.2m dwt, 78 containerships and 47 tankers of 4.9m dwt.
The new estimates are nearly double those of rival classification society Lloyd’s Register, which cites figures showing confirmed cancellations totalling 2.3% of the orderbook.
France’s Bureau Veritas confirmed that 40 newbuildings it was classifying were cancelled.
The uncertainty over how many ships will be built reflects the lack of concrete information from yards in the world’s two largest shipbuilding countries, South Korea and China, as well as their strategies to deal with owners who cannot raise the money to pay for a glut of ships on order.
Yards are reluctant to detail cancellations, but at least several major shipbuilders in China have accessed funds via government- backed banks to build and own cancelled bulk carriers, which will be begin trading by the year’s end.
“This is an indirect subsidy effectively,” Diana Shipping president Anastassis Margaronis said.
“It’s not the way we saw [subsidisation] in the 1980s, but through the credit door or the finance door. They are not reducing the price of the construction by giving grants but they are facilitating the building of the ships by offering credit and debt to the yards.”
Shipping executives who have recently visited yards in China, where half the world’s bulk carriers are on order, reported that yards were keen to build ships and open to requests for delivery deferrals, also offering to renegotiate prices based on any cost savings.