Hong Kong-listed shipping firm Jinhui Holdings has scrapped a US$245.24 million order for two very large ore carriers as borrowing costs surge amid the global credit crunch.

The cancellation would also reduce any future business risk as the credit market remained affected by the subprime mortgage crisis in the United States, the company said.

'Proposed terms and conditions from banks were found to be much less flexible than those previously enjoyed by the group, coupled with a significant increase in the cost of borrowing,' it said.