China shipbuilding industry, which ranks second in the world in terms of tonnage and number of vessels built, will continue to struggle due to the global recession, even if new orders increase in the H2 of this year.

Mr Wang Rong an official at the Ministry of Industry and Information Technology said China's shipbuilding industry has deteriorated since last September as new orders shrank and vessel prices dropped.

According to statistics from the MITT, the country shipbuilders received 7.87 million deadweight tonnes of new orders in the first seven months of the year a decrease of 78%YoY. Meanwhile, orders of 75 vessels or 3.88 DWT were canceled during the same period about 2% of the industry total current orders as of the end of July

Mr Wang Wenjun deputy director of the Economic Research Center within China State Shipbuilding Corporation said the price of vessels also plunged due to declining demand of new ships. The average price of ships has dropped more than 20% during the past year.

He said the domestic shipbuilding industry also faces problems such as financing difficulties and overcapacity.

Mr Huang Pingtao Chairman of the Chinese Society of Naval Architects and Marine Engineers said the shipbuilding industry has developed very quickly over the past three years, reaching a production capacity of 66 million tonnes a number that is expected to rise to 80 million tonnes to 90 million tonnes in 2010.

Mr Huang of Chinese Society of Naval Architects and Marine Engineers said "A stimulus plan issued February by the State Council for the shipping industry will help Chinese shipbuilding companies recover from the downturn more quickly."

The plan also said that China might become the global shipbuilding leader by the 2015.

(Source from Global Times)