Credit Crunch Spreads to Shipyards

The impact of the credit crunch is expected to have limited impact on US shipbuilders. Strong demand for US built ships enabled for secured financing and contracts. Strength in construction is expected to remain through 2011.

The impact of the "credit crunch," while real for individual companies, is not a factor for the overall shipbuilding industry.  The few building slots that have been canceled by owner default have been readily resold at higher margins.  The drop-off in post-2010 orders has its roots in oversupply of new ships and shipbuilding capacity.

Shipyards had never had it so good than the bonaza they experienced over the past two years. High oil prices drove the offshore rig making market. Replacement of ageing fleets drove the tanker markets. The sizzling economic growth in China create huge demands for tonnages for bulkers and container vessels. Exploitation of gas deposits in the Middle East resulted in record orders for LNG carriers...