According to Lloyd"s Registers Group, global ship orders tumbled 90%in October 2008 as the credit crunch damped world trade and made it harder for shipping lines to borrow money.
Mr Richard Sadler CEO of Lloyd"s Register said that ship owners ordered a total of 37 container ships, tankers and other vessels in October 2008 as compared with 378 a year earlier.
Mr Sadler said that the global full year order tally will likely fall more than the 15% previously predicted by Lloyd"s Register. He added that "We underestimated it. On the positive side, compared to 2006, 2007 was an exceptional year."
According to Clarkson Plc, contracts last year surged 50% to 261.3 million DWT. In the first nine months of 2008, orders dropped 27% to 142.9 million DWT.
Mr Sadler said that the slowdown means that some shipyards haven"t taken an order since the first week of September 2008. He added that new contracts in China dropped 62% to 24.35 million gross tonnes in the first ten months. New orders in Korea fell 50% to 33.68 million gross tonnes.
The Baltic Dry Index, a measure of commodity-shipping costs, surged to a record 11,793 on May 20th 2008, having more than tripled in three years. Rates have since tumbled 93%, to near six year lows, as traders are struggling to get credit for shipments. Chinese steelmakers are also curbing production amid slowing demand for new buildings and cars.