If you compare ship repairing to a teeterboard, then shipbuilding and scraping would be the kids playing at the two ends – one loses and the other gains.
Under the influence of global shipping economics, the industry chains of shipbuilding – shipping – ship repairing – ship scrapping in China are undergoing inevitable variations.
Shipbuilding to Lose Further
As China Association of National Shipbuilding Industry (CANSI) recently revealed that about one out of five Chinese shipbuilding enterprises fell into losses in the first quarter of 2011 and the total loss came to CNY 1.11bn ($171m). 
The Association predicts that Chinese yards would face severer losses this year due to the increasing labor cost and material prices as well as yuan appreciation.
Chinese shipbuilding industry now is confronted with two difficulties. One is the rising cost caused by increase of material prices, labor cost and yuan appreciation, which greatly cut down shipyards’ profits. The other is the persistently declining order backlog. The structural changes in ship demand this year has greatly depressed Chinese shipyard in receiving new orders while newbuilding output has been normal. Many shipyards are beginning to run about for orderbook which are likely to run out in one or two years.
The continuing high-value ship market trend, the long-last increasing cost will only make the situation worse. Chinese shipyards would have to shift from size-oriented to profit-oriented and enhance its capability to build high-value and big ships.
Ship Repairing Comes into Winter
The fluctuations of shipping industry have influenced ship repairing industry.
The bleak global economics, shipping overcapacity and inadequate cargo jointly led to the sluggish shipping market and declining shipbuilding industry. Under this situation, many shipyards turned to ship repairing business for survival. It caused intense competition of ship repairing seriously. As a result, the repairing price dived a lot, as well as shipyards’ profits. An official said the current price had hit the lowest point and was expected to down further.
Some shipyards even went bankruptcy due to capital chain rupture and had to accept acquisition and integration. Facing the ambiguous market, Chinese ship repairing enterprises may seek its way out by enhancing bulker, containership, tanker repairing and rebuilding. Meanwhile, they should shift focus on offshore and other high-value vessel repairing and rebuilding, entering into building steel structure conversion market and other fields
Spring Comes for Ship Scrapping
As shipbuilding goes downward, ship scrapping are just embracing its flourish spring.
As the barometer of Chinese ship repairing industry, the shipbreaking yards in Changjiang Village in Jiangsu Province has currently now boasts global No. 1 demolition volume which occupying half of national total.
Ship scraping industry is quite seasonal and may completely stay idle in the peak of shipbuilding market. Surprisingly, it’s now robust in the sluggish shipbuilding season.
Till the end of April, global shipbreaking volume amounted to 2.05m dwt and Chinese are far ahead in the market by 790k dwt.
The international shipbreaking industry is profited from skyrocket in demolition market, especially the scraping of Capsize bulker. Statistics shows that the current global Cape scraping volume has exceeded that of 2010 and the annual volume is supposed to be over 30m dwt.