Coronavirus could cause six month delay to deliveries

Malcolm Latarche

Malcolm Latarche · 17 February 2020

ShipInsight


As the disease outbreak continues to affect shipping and trade, a Reuters report suggests global ship deliveries have been hit as yards in China struggle to get fully back to work with one shipbuilder saying it could not deliver two vessels.

China’s Jiangsu New Times Shipbuilding, which has an annual production capacity of 5mdwt, had issued a force majeure notice on two vessels to Bermuda-based cargo operator 2020 Bulkers, a spokesman said. “Workers are still not coming back to their positions due to the coronavirus. It is not known when they will resume work and when the two vessels will be completed,” he added.

This confirmed a statement by 2020 Bulkers last week which said that two Newcastlemax dry bulk vessels due to be delivered in April and May face possible construction delays.

Chinese authorities have asked companies to put workers into quarantine for 14 days after returning from their home towns for the Lunar New Year holiday, which was extended by a week. The China Association of National Shipbuilding (CANS), which represents shipbuilders, said in a statement it was “generally hard for the vessel makers to resume work and deliver vessels on time”.

Some of China’s shipbuilders were highly likely to be unable to deliver vessels before July 1, which increased the risk of not being able to fulfil their contracts, CANS said.

Reuters also covered the impact on scrubber installations saying, “Over 70% of vessels currently undergoing scrubber retrofitting are doing so in China. On that front, there are on-going delays at shipyards because workforces are depleted, taking vessels out of action,” Charles Chasty, research analyst with broker Affinity Shipping, said. “China accounts for over 40% of all new buildings. So, beyond the on-going current issues, such as the depletion of the labour force, vessels currently under construction are being delayed. Some of these vessels may even slip into 2021,” Chasty told the Reuters Global Markets Forum.

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