Chinese state-owned shipyard says margins of new orders are too small for shipbuilders to survive.

CSSC-affiliated Guangzhou Shipyard International (GSI)'s General Manager Han Guang-De calls for resistance to price wars between yards to protect margins.

Mr Han told reporters after the annual general meeting: “I realise it is a good time for shipping lines to hunt for bargains if they shied away from ordering vessels when the market peaked. But I would say shipyards should resist fighting for orders at all costs.”

He added, “Generally speaking, newbuild prices have fallen by around 10% so far this year while labour costs continue to rise. The more orders shipbuilders have, likely the more losses they make.”

Chinese yards have lost their international competitiveness because South Korean shipbuilders are also willing to offer low prices amid industry woes, Mr Han said.

In this situation, Mr Han said, new orders were “poisonous riceballs” for Chinese yards. “If you don’t take them you might get starved; but if you eat them, there might be some bigger issues down the road.”