Economic Slowdown Hitting Dalian Industry
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By Brian_Rapido on Sun, 2008-12-07 10:32
I recently noticed this page Credit crunch bites into Cosco bulker orders:
Cosco Corporation (Singapore) has announced that its subsidiary, Cosco (Dalian) Shipyard has agreed to cancel ship building contracts for two 57,000dwt bulk carrier vessels and postpone the construction of three other similarly sized vessels as the result “of the prevailing unfavourable market conditions”.
According to the new agreements, the cancellations are conditional upon the unidentified shipowner supplying 80% of the total contract price for the remaining three vessels by December 2008, which is earlier than originally agreed under the contracts signed in July 2007.
The last instalment - amounting to 20% of the contract price - will be paid as per the original schedule and the three vessels are slated for a delayed delivery in end-June 2010 instead of December 2009. Additionally, the shipowner has agreed to compensate Cosco Dalian for all expenses incurred with respect to the two cancelled orders for which construction has not commenced.
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Lots of wording about how Cosco was compensated but in the end they're losing business, and 57k dwt ship is a reasonably large think to lose - I'm no ship builder but I'd imagine they're around 150 meters in size for that size. Add to that the recent departure of so many here in the oil business... are there any other hard indications of trouble in Dalian's general economy? How's the Software Park doing - hiring this year or frozen new hires?
An Interesting Find
I can only relay my experience buying socks in Victory Square last week. The stall holder said I was the only person to buy anything that day - when asking if that was unusual they stated there had been a notable slowdown over November, unusual because the year before, according to them, people usually notice the cold November and actually buy more socks in that month than most others.
I also just read Paul Denlinger's article over on China Vortex small things which say alot, among his observations:
* building management are reducing electricity consumption (in the form of communal lighting),
* his China Masseuse Index (综合保健 or Total Healthcare Package) has gone down from 398 yuan to 298 yuan
* bus drivers are increasingly coasting down hill.
I would agree with these points. Large and small indicators clearly show China's propensity to consume decreasing. For how much, for how long?
Great Video
I just saw a great video by Nassim Taleb, author of Black Swans. In it he stated "When you decide not to buy that item, what happens? A call goes down the inventory line and the factory in China closes a few hours later." Some calls happen faster than others, but I don't see them stopping. Here's the video:
http://www.charlierose.com/view/interview/9713
Imports Falling Hard
http://chinadaily.com.cn/china/2008-12/11/content_7292285.htm
"Exports dropped 2.2 percent to $114.99 billion last month, the first monthly decline in seven years, Customs authorities said Wednesday. And FDI fell 36.52 percent year-on-year to $5.3 billion, the Ministry of Commerce said.
But the country's trade surplus soared to a record $40.09 billion in November despite a fall in exports because imports fell, too, by 17.9 percent year-on-year after having risen 15.6 percent in October.
Wholesale inflation eased to a 31-month low, thanks to a fall in commodity prices because of rising inventory and weak demand. And the producer price index (PPI) rose 2 percent year-on-year, the lowest since April 2006."
Because beans.
The latest from Lloyds List.
The latest from Lloyds List. 2008 was a good year, and 2009 seems to hang on deals. Even though 2009 may not be that great, business could fall 25% over 2009 and we'd still just be back at the beginning of 2008.
Sorry, full article is subscription: http://www.lloydslist.com/ll/news/dalian-port-enjoys-rise-in-throughput/...
HONG Kong-listed Dalian Port has posted brisk operating figures for 2008 and expects a breakthrough on its co-operation with Japan’s NYK, writes Sandra Tsui.
The firm said that its oil and liquefied chemical throughput rose 1.3%, while container volume increased 28.3%.
totaly agree cobro
totaly agree cobro
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