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Deutsche Bank: Painful consolidation awaits Asian shipyards

The three major countries in Asian shipyard industry, Japan, China, and Korea, will suffer even more in the years to come. The order books have almost halved in size, and that will lead to difficultyears for the shipyards, says Deutsche Bank.

Photo: Jyllands-Posten

“For the small shipyards in Korea, China, and Japan the painful industry restructuring that started in 2010 is expected to continue as shipyards struggle with lack of orders and tight financing,” writes analyst Sanjeev Rana, of Deutsche Bank, in an analysis of the Asian shipyard market.

“Despite very low ship prices, shipowners expect prices to fall further due to competition among yards as 45 percent of global shipyards have no orders to work on post-2012. This means finances of small shipyards are likely to deteriorate further and banks might be unwilling to issue refund guarantees to them, starting a negative feedback cycle,” the analysis says.

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