The continued shipbuilding downturn has made Chinese shipyards desperate to get new orders. Gao Yanming, chairman of Hebei Ocean Shipping Co (HOSCO), warns the shipyards not to receive low-price ship orders blindly.
“Currently the newbuild price remains at a very low level and some newbuild prices are even lower than shipbuilding costs,” Gao said. “In this case, shipyards should remain rational and carefully calculate the cost and estimate the market trends, otherwise the orders may bring even more troubles for the shipyards.”
Gao also predicts the newbuild price will gradually go back to a reasonable level as economies in many countries and regions are starting to revive which will increase the international trade volume, meanwhile, more shipowners have started to recycle old vessels to optimise their fleet. “Besides, the steel price and labour costs are all appearing to be on an upward trend which will also increase the newbuild price,” Gao reckoned.