Asian shipyards will be unable to translate rising costs into higher newbuilding prices amid surplus yard capacity, Seaspan chief executive Gerry Wang forecast this week.
He said this has left owners in a strong position to drive a hard bargain in the newbuilding market. 
Although shipbuilders are paying more for steel plate and other materials, facing higher electricity prices and being hit by the weaker dollar, those costs will not translate into more expensive ships, said Mr Wang.
Newbuilding prices will be determined by supply and demand, with massive surplus yard capacity ensuring shipowners should continue to enjoy falling prices.
Yard prices “are not driven by cost,” Mr Wang said in a presentation to investors this week. “It is all to do with supply and demand.”
That is why New York-listed Seaspan, which is in talks with yards for a large number of new ships and has inked letters of intent, has not yet signed firm commitments.
“We are negotiating very hard to get what we want from the yards,” he said. “We are trying to squeeze them for as much as possible. We are being very tough.”
Mr Wang described the bargaining tactics Seaspan is pursuing with shipyards in South Korea and China as “revenge” for the skyhigh newbuilding prices of recent years. “That’s life,” he added.
If Seaspan did not take full advantage of the softer market conditions now prevailing as a result of excess yard capacity, the company would not be doing a good enough job, said Mr Wang.
He noted that, despite weaker shipping markets since the boom times of four or five years ago, shipyard capacity had continued to increase.
The shipbuilding industry had done nothing to curtail capacity as newbuilding demand slumped during the downturn in the container, dry bulk and tanker trades, said Mr Wang. Instead, new yards continued to spring up “like mushrooms”.