Many Chinese shipyards have been stronger in price competitiveness since global financial crisis in 2008, in order to secure works, however, they recently start to refuse loss-making bargains.
According to brokers, many Chinese shipbuilders with some amount of orderbook are declining newbuilding negotiations since a number of shipowners are asking unreasonable prices that unfulfill even break-even points.
One broker said, "Shipyards are no longer interested in loss-making newbuilding projects. They'd rather wait until market recovers."
For instance, Jiangsu-based private-owned New Century Shipbuilding has contracted no newbuilding year to date and is avoiding low-margin orders. An official from New Century said "We hope to win new orders, but it would be meaningless with current market prices. We plan to focus on building those on the book and hold out as long as possible."
Local shipbuilding players explained that shipyards with some tonnages on the book would be able to survive by slowing down construction or embracing owners' requests for delaying deliveries.
Quite a number of shipbuilders in China, including China State Shipbuilding Corporation (CSSC), Yangzijiang Shipbuilding, Sainty Marine, Huanghai Shipbuilding, Yangzhou Guoyu Shipbuilding, etc., are establishing ship-owning subsidiaries with a purpose to secure works and protect decreasing prices simultaneously.
SinoPacific Shipbuilding Group recently founded a shipowning company in Hong Kong. The newly-founded company places new orders at subsidiary shipyards and charter them to the third shipping company, then sells these vessels.