New orders for Chinese shipyards fell 96% in the first five months of 2009, the Ministry of Industry and Information Technology (MIIT) released on Tuesday.

The ministry noted that the speed of shipbuilding is accelerating, but the number of new orders tumbled in China.

In the first five months, Chinese shipbuilderss completed 12.16 million deadweight tons (DWT), 61% up from same period last year, while the new ship orders totaled 1.18 million DWT , down 96% year-on-year.

New orders in May stood at 190,000 DWT and total orders held by Chinese shipbuilders were 192.2 million DWT by the end of May, down 6% from the beginning of the year.

The value of total industrial output by domestic shipyards reached 203.3 billion yuan ($29.8 billion) in the first five months, up 38.8% year-on-year, according to a statement on the Minister's Website. However, the growth rate was down 18.7% from a year earlier, the statement said.

Shipping manufacturing amounted 155.3 billion yuan ($22.7 billion), up 45% year-on-year, with the growth rate down 6.3%. Ship recycling industry reached 25.8 billion yuan ($3.78 billion), 8.7% up from a year earlier but 57.3% down in growth rate.

The export value of domestic shipyards rose 25.8% to 96.8 billion yuan ($14.2 billion) from January to May in 2009, according to the statement.

The price for new ships may continue to drop before the end of the year and dismantling old vessels can help the revival of the industry, Rujing Zhu, a consultant at China Shipbuilding Industry Research Center, was quoted by Shanghai Securities News as saying.

MIIT announced a detailed plan to boost the shipbuilding industry on June 9, which would ban the building of new shipyards from 2009 t0 2010, and will also encourage qualified shipbuilders to list their shares and issue bonds.

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