The crisis in world shipbuilding is deepening, with very slow order intake in the major shipbuilding regions in the first six months of 2002. The main reasons are past over-supply, slowing economies around the world and the effects of 11 September. Only Japanese yards currently still manage to fill building slots. However, this is very much helped by domestic demand, in particular for bulk carriers, as has been long-standing practice in this region.
World-wide ordering for new ships in the first half of 2002 was down by almost 2/3, compared to average quarterly figures in 2000, which on the other hand was the best year ever for shipbuilding. In the EU, the situation is even worse, with ordering being down by almost 4/5 compared to the year 2000.
Most affected are container ships and cruise ships, but crude oil tankers and LNG carriers have also seen lower demand. Demand has remained comparatively stable only in the segment of product tankers, due to replacement needs stemming from new EU maritime safety legislation, and in the segment of bulk carriers.
As a result shipyards are running out of work and a number of bankruptcies and lay-offs, mainly in Europe, have already occurred.
Prices for new ships have declined further and are now at the lowest level for more than a decade.
Yards in South Korea have further lowered offer prices, despite increases in all major cost factors and a number of Korean yards may find it difficult to meet their financial obligations if order intake is not increased soon.
The Commission's detailed cost investigations for orders placed in South Korean yards confirm the findings from previous reports, namely that ships are offered at prices which do not cover the full costs of production. The investigations show that the gap between offer prices and calculated normal price is again widening.