Singapore-listed shipbuilder Yangzijiang Shipbuilding has been served with three more terminations for shipbuilding orders during the second quarter of 2016, the company said in a stock exchange filing.
The orders that were cancelled were for one 10,000 TEU containership, and two bulk carriers with a capacity of 82,000 dwt and 64,000 dwt, respectively.
However, this might not be the end of contract terminations as the shipbuilder said that it does not rule out the possibility of more cancellations given the challenging market conditions, but it is unlikely to be high unless the shipping market deteriorates further.
The financial impact from the three cancellations is not expected to be significant as these vessels have yet to start construction, according to the Development Bank of Singapore (DBS Bank).
Furthermore, the bank said that the buyers have been found for all previously terminated vessels which are under construction at the yard.
Namely, eight out of the ten vessel orders that were terminated in 2015 and during the first quarter of 2016, on which construction has commenced, have been resold. These units are scheduled for delivery in the second half of the year with some profit margin.
Additionally, the shipbuilder secured orders worth USD 80 million for four 1,800 TEU containerships during the second quarter, lifting year-to-date wins to USD 590 million. As this represents 24% of the shipbuilder’s internal target of USD 2.5 billion worth of orders, Yangzijiang Shipbuilding has lowered its goal to USD 2 billion, DBS said.
World Maritime News Staff