Chinese Shipyards "Vanish" As Baltic Dry Collapses To New Record Low
Another day, another plunge in The Baltic Dry Index, which just dropped a further 3.1% to 402 today - a new record low. While the index is driving headlines, under the surface, reality in the shipping (and shipbuilding) industry is a disaster. Total orders at Chinese shipyards tumbled 59% in the first 11 months of 2015, and as Bloomberg reports, with bulk ships accounting for 41.6% of Chinese shipyards’ $26.6 billion orderbook as of December, there is notably more pain to come, as one analyst warns "Chinese shipbuilders won’t be able to revive even if you try breathing some life into them."
Baltic Dry Bloodbath...
About 140 yards in the world’s second-biggest shipbuilding nation have gone out of business since 2010, and more are expected to close in the next two years after only 69 won orders for vessels last year, JPMorgan Chase & Co. analysts Sokje Lee and Minsung Lee wrote in a Jan. 6 report. That compares with 126 shipyards that fielded orders in 2014 and 147 in 2013.
As Bloomberg reports, the weakening yuan and China’s waning appetite for raw materials have come around to bite the country’s shipbuilders, raising the odds that more shipyards will soon be shuttered.
“The chance of orders being canceled at Chinese yards is becoming greater and greater,” said Park Moo Hyun, an analyst at Hana Daetoo Securities Co. in Seoul.
“While a weaker yuan could mean cheaper ship prices for customers, it still won’t be enough to lure back any buyers. Chinese shipbuilders won’t be able to revive even if you try breathing some life into them.”
And it is not going to get better anytime soon...
Bulk ships accounted for 41.6 percent of Chinese shipyards’ $26.6 billion orderbook as of Dec. 1, according to Clarkson Plc, the world’s largest shipbroker.
That compares with a 3.5 percent share at South Korean shipyards, which have more exposure to the tankers and gas carriers that are among the few bright spots in a beleaguered shipping industry.
Builders have sought government support as excess vessel capacity drives down shipping rates and prompts customers to cancel contracts. Zhoushan Wuzhou Ship Repairing & Building Co. last month became the first state-owned shipbuilder to go bankrupt in a decade.
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Another day another farcical 3:30 ramp. F-CK -FF -OTHERFUCKERS!
3:30 has become 3:20 ramp...
The real reason China is suddenly interested in building aircraft carriers?
Forget the aircraft carriers... they will be hiding the People's Army inside shipping containers.
No worries guys, the bigger the bubble, the bigger the pop ... its coming sooner than later. Be ready!
They have found (as have the Russians) that fueled projectiles like DF-21's and S-400's are much cheaper to build, operate, transport and ultimately use. The 'security' of an aircraft carrier battle group just ain't quite the same as it used to be...
You're allowed to say fuck on here without blanking out letters. We're all adults here.
Protecting children from cursewords is safe-spacing. Frankly, fuck the kids ears, let them hear how adults speak.
All adults here? Speak for your self, I like being an immature 52 year old.
Here ya go, 8 of 9 words in a sentence: Fuck the fucking fuckers, fuck fucketty fuck fuck fuck.
;-)
+10e6.
Fuck.
punk kid.
Immediately reminded of:
Monty Python Graham Chapmans funeral speech eulogy by John CleeseI never saw that before. It's fantastic. Thank you.
I remember that. Fuck, we're getting old.
Sadly we do
Fuck
Ramp twice a day, its good for your prostate.
Should do wonders for the next gen of super-freight ship demand, right?
Who will pay for them? And who will buy them at the auction sale afterwards?
The coming naval conflict in the S China Sea should do wonders clearing old ships off the books.
You're really getting under my skin.
;) You gotta be quick!
One would think within a year 40' containers would get cheap. I would love 3 of them for storage and maybe a man's 'doghouse' apt. Don't expect it to happen though. I have been waiting on drill stem to drop in price, ain't happened yet. With the frackers shut down the market here in East TX should be glutted with pipe.
For China's sake I hope they don't use the carrier program like they did their ghost cities, big floating shell that can't do it's job but looks good on paper. Bad timing to launch a major ship acquisition for them given the numbers. Could be a few unfinished ships in a few years rusting away at the defunct shipyard.
Just got back from Costco...a Pack of Organic chicken breasts...$31.42 Really? And gas is $2.14 a gallon..... Portland Oregon. Shouldn't gas be under a buck? Deflation in weird places...other things through the roof. Look at Platinum...I am going to keep buying all the way down. Looks like a deal at $830 an oz.
when it says "organic" they can charge you whatever the fuck they want... duh
Ahhh...no...it is called REAL food. Your $1 burger will cost you in those cancer bills.
and they don't have to tell you it was processed in China.
San Antonio has gasoline as low as $1.59/gallon now.
Given a reasonably longer time frame... It DOES appear to be a bargain at such a large discount to gold.
Also, Nick Barisheff in his book $10,000 Gold, wrote that platinum is a leading indicator of prices. Higher Pt prices typically correlate with coming inflation. Lower prices of Pt signal DEFLATION.
Pt down a lot? Ruh-Roh.
"Platinum is for optimists."
But, I own it (average cost a lot higher than the $840 or so now). As the world economy recovers (we hope), Pt should do very well in the coming years.
I am holding off on buying platinum because I expect demand to sink further when the huge "Ron Jeremy type" channel stuffing in the auto world comes to its conclusion.
Just sink a fewships to the bottom of the ocean and create a shortage. See..., problem....., solution. Nothing a little Keynesian policy can't fix,
I'm Paul Krugman and I approved this message.
I remember when I was Paul Krugman. Those were the days.
I remember those days too. I liked that Paul Krugman. I seem to remember a Mr. .... er, what's his name Jimi Hendrix?
Yah! I remember that guy too! Those guys! :)
Gota ramp stawks up for the mackdaddy speech
That's the 'Long-Legged' Mac Daddy to you, son...
"Chinese shipbuilders won’t be able to revive even if you try breathing some life into them."
So just sink a shit load of ships and create wonderful new fishing reefs. Then build new ships.
That sounds like a plan that would work....Right?
You know it wouldn't suprise me if someone would think that's a great idea.
FUBAR
Print moar shipyards!!!
All global shipping has ceased
http://www.marketoracle.co.uk/Article53636.html
This was already debunked yesterday in the comments section of the article related to this on ZH. Somebody didn't know how AIS software works, they couldn't see any ships far away from land (duh, because it's AIS and not S-AIS) and they thought they had a cool story on their hands. They got all excited and forgot to fact check.
However, global shipping is not in a good way right now. No arguement there.
thanks for the update/correction
Keep an eye on the container shipping...
Harper Petersen Index -- Topped out at 1402 in 2008. Bottomed on the first down wave (1/2009) = 275; maxed at 901 in 2011.
It never recovered. Today it is at 363 and dropping with Baltic Dry Index.
http://www.harperpetersen.com/harpex/harpexRH.do?timePeriod=Years10&&dat...
Ins is correct. anything 4,250 teu and up is hitting at/near alltime lows
Thx for the link, bookmarked. I see shipping do a hard dip in 2008, 2011 and again now. Hmm, almost like China's economy is somehow tied to the USSA? At least the whole world will be in the shitter together.
The chinese have found a new promising niche :
Making DRONES... WOrld #1.
Just like smart phones...
Watch out; China could be top dog in the AI revolution.
China has to wait on American innovation to be top dog. If they can't hack it they can't do it.
well whatever helps you sleep hazard. Your ignorance is laughable.
My 70 years of ignorance has gotten me to a postiion that would make you green with envy. You need to get off your computer and try and catch up, son.
and now....for my next trick.....