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Cansi urges Chinese yards to avoid offering low prices

Cansi urges Chinese yards to avoid offering low prices
Chinese shipyards should no longer dangle low newbuilding prices and compromise on quality in order to win shipbuilding contracts, urged Zhang Guangqin, president of China Association of National Shipbuilding Industry (Cansi).

“We have to admit that in the eyes of shipowners, the quality of China-built vessels is not first class. Some owners would rather approach Japanese or Korean yards,” Zhang told delegates at the shipbuilding conference of Marintec China 2013 in Shanghai on Wednesday.

“We should stay away from competing for orders by offering low newbuilding prices, which would potentially compromise the quality of our finished products,” he said.

Zhang further urged for a halt in China's shipbuilding capacity, which has reached severely excessive levels for the country to be productive. At present, China boasts a total shipbuilding capacity of 80.1m dwt with utilisation at only 50-55% during the first nine months of this year.

During the current recession of China's shipbuilding industry, registering a completed tonnage of 40-50m dwt a year would be considered encouraging, according to Zhang. From January to September 2013, Chinese yards have delivered a total of 30.61m dwt of vessel tonnage, down 24.6% year-on-year.

“Chinese shipyards should not expand their capacity irrationally anymore. The focus should now be on cooperation and consolidation. It is also critical for us to raise our capabilities in producing high specification and more complex offshore units and equipment,” Zhang said.

“Becoming the world's leading shipbuilding nation should be not a goal, it should be a continuous process. And regardless of whether the market is in a downturn or an upturn, we should focus on raising our quality,” he urged.