Orders for new ships tumbled 45.2 per cent to the equivalent of 6 .7 million compensated gross tons in fiscal 2008.
Orders for new ships tumbled 45.2 per cent to the equivalent of 6 .7 million compensated gross tons in fiscal 2008, according to data released Tuesday by the Shipbuilders' Association of Japan. With shipping firms less willing to invest since the downturn in the global economy last fall, orders fell to the lowest since fiscal 2001 , when the tally came to 5.42 million compensated gross tons.
The market for new vessels had been brisk since 2003 due to such factors as rising resource shipments to emerging economies. As a result, domestic shipbuilders "have a three-year backlog of construction orders," Masamoto Tazaki, association chairman, told reporters.
But Tazaki cautioned that "over the coming one to two years, we don't expect the high level of new orders enjoyed to date." Japanese shipbuilders are bracing for intense competition from South Korea, China and other foreign rivals. In the wake of the shipbuilding boom, South Korea and China have been building new dockyards and making huge capital investments.
With overseas competitors offering extremely low order prices, "This could lead to market turmoil," warned Tazaki, who is also chairman of Kawasaki Heavy Industries Ltd.