Chinese shipbuilders initiate fresh discussions with owners amid US port fee proposal

China’s shipyards have initiated discussions with both domestic and international owners for new contracts, with COSCO standing out as a prominent example of this ongoing activity. Sources indicate shipyards are busy negotiating across various sectors, including container vessels, chemical tankers and specialised tonnage such as multi-purpose carriers.

The Chinese government is also actively promoting the acquisition of additional tonnage, particularly in the Newcastlemax segment, in anticipation of rising demand for these vessels. This demand is largely driven by the Simandou iron ore project in Guinea, which is set to begin production by the end of 2025. As a result, Chinese owners have also been steadily acquiring secondhand large-sized tonnage since last year.

In the container vessel sector, MB Shipbrokers noted in its latest report that interest is shifting towards feeder and mid-sized vessels, with most of the orders coming from regional liner companies. These projects typically involve vessels ranging from 1,400 to 4,300 TEU. "Chinese builders continue to be the preferred choice for this segment, not only due to competitive pricing but also because Korean and Japanese yards are targeting larger vessels," analysts added.

Shipowners taking a cautious approach

It remains to be seen whether these discussions will translate into contracts or if owners will continue the slow pace observed at the start of the year.

“There was already a trend of stalling newbuilding investments prior to the US administration’s proposal. However, this adds another reason for owners to delay decisions until they see how the proposed measure will unfold, before committing to new tonnage,” shipbuilding sources observed.

Shipbroker Clarksons reported a significant 70% decline in newbuilding contracts in the first two months of 2025, compared with the same period last year. Greece’s Xclusiv Shipbrokers noted the container vessel sector remains the most active, with 35 vessels ordered between January and February. Analysts have also recorded contracts for 14 tankers, 11 LNG carriers and 10 bulk carriers, while only one LPG carrier has been ordered.

Market sources attribute this slowdown to US political developments and broader global geopolitical factors.

In the previous week, Greek shipbrokers tracked three separate newbuilding orders. Two of these involved Chinese shipping companies ordering Newcastlemax and Ultramax tonnage at domestic yards, while the third saw a German owner order four 1,900-TEU container vessels from a Chinese yard.