Be Careful What You Wish For

Over the past several weeks Worldyards visited a number of greenfield shipyards and “potential (virtual/under construction)” shipyards in China. It is not a pretty sight. Not a lot is happening in some giant greenfield yards, either because of the cashflow constraints on part of the shipyards or shipyard wanna-bes, or on the part of ship-owners of the ships being constructed in the facilities. The premises of the “potential” yards are typically huge, strategically located and blessed with great natural conditions. We see giant holes of what are meant to be giant drydocks. But little in terms of new construction is going on and very little machinery. We are talking more than 10 VLCC drydocks at varying degrees of completeness.

There has never been a shortage of goldilocks cheerleaders in any kind of markets. The recent surge in BDI has let them to proclaim that the worst is over. They also take comfort in the increased pace of bank lending in China in January, Chinese PMI as evidence that we have bottomed out.

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