South Korea's Daewoo Shipbuilding & Marine Engineering, shown above, along with Hyundai Heavy Industries and Samsung Heavy Industries, have benefited from the industry's move away from China's cheaper vessels. Overall sales by Chinese yards have been difficult as struggling shipowners seek quality vessels to offset rising maintenance and fuel costs.
Chinese shipyards are offering to sell vessels at discounts of more than 20 percent as builders look to protect market share from higher quality Asian rivals and stay afloat amid a wave of consolidation, industry sources said.
Rock bottom freight rates, slowing economic growth and an oversupply of ships have forced maritime firms to cancel or delay hundreds of new orders, leaving yards especially in China with unwanted vessels for sale.
As many as half of China’s 1,600 shipbuilding companies are expected to go bankrupt or be acquired by larger rivals in the next two to three years and pressure is growing to move inventory, according to senior Chinese industry executives.
“The fact is that Japanese and South Korean yards are longer established and tend to have better technology, and therefore able to build higher quality vessels.”