UOB Kay Hian, securities company in Singapore, says executives at China's Yangzijiang Shipbuilding and JES believe newbuilding prices have bottomed out with margins already in the “low single digits” for a new bulk carrier.
Analyst Lawrence Li says JES has stopped bidding for new projects as margins are too low and payment terms are risky.
It also fears filling slots with cheaper vessels will mean missing out on more appealing deals if the market recovers despite a consensus that there will be no sharp pick-up in newbuilding orders before the end of 2013.