Despite skyrocketing new orders placed at Chinese yards during the first nine month of this year, industry watchers are on the same page regarding that China still needs more time to enter an official recovery phase due to protracted low newbuilding prices and small proportion of high-value added vessels.

Tallied by the Ministry of Industry and Information Technology of China, new orders awarded at Chinese yards till the third quarter of this year amounted to 38.06m dwt, up by almost 147% from the corresponding period a year ago. In addition, the Chinese yards were seen to stand on 114m dwt orderbook as of the end of September, down by 5.7% year-on-year but up by 6.6% compared to late 2012.

However, China Daily reported that operating revenue of CSSC-affiliated CSSC Jiangnan Heavy Industry fell to CNY 583bn ($96m), a 18.25% year-on-year decrease, during January-September period, and the company explained that its hurt performance was attributable to low ship prices, rising operating costs, delayed debt payments from CSSC-affiliated shipyards and so on.

Moreover, an official from another CSSC-affiliate Shanghai Waigaoqiao Shipbuilding (SWS) pointed out that even though the builder won many orders in the first three quarters, the prices of containership and bulker have not gone up much, saying, “The industrial chain of China's shipbuilding sector is still weak.” And he added that Chinese shipyards are only good at producing low-priced ships, such as containership and bulker.

A high ranking official at Nantong Mingde Group also said, “Steel and labor costs keep rising, making profits even thinner,” and added, “Our company is preparing for another difficult year in 2014.”