Coinciding with a sharp turnaround in global shipping freight rates, Chinese shipbuilders saw new orders tumble in the first half of the year.
According to China’s state-run newspaper the People’s Daily total orders slumped by 72.6% in the six months to June. While actual orders slid, the total capacity of vessels built over the same period jumped to 18.53 million tonnes, an increase of 6.3% from the same period a year earlier.
Given the increase in carrying capacity of ships built in China, global shipping freight rates have rebounded strongly since hitting a record low level earlier in the year.
Overnight the Baltic Dry index, a gauge on global shipping rates, surged to 900, the highest level seen since December 10 last year and 76.8% above the record-low level of 509 struck on February 18 this year.
Freight costs for larger Capesize vessels, up another 5.4% overnight, have been a major contributor to the gains in the headline index.
While the rebound in vessel running costs, particularly higher crude oil prices, has contributed to the rebound in the freight rates, the outlook for new vessel orders may also be contributing to the recent rebound in costs.
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