China's Shipbuilding Sector Faces Turmoil Amid U.S. Port Strategy Concerns

Shipping firms are hitting the brakes on purchasing dry bulk carriers from China, largely due to uncertainty surrounding potential port fees proposed by President Trump. these charges could substantially impact vessels built in China,leading to a sharp decline in sales.

In March, only four bulk carriers from China changed hands in the second-hand market, marking the lowest number since 2022 and just 20% of last year’s monthly average. simultaneously occurring, transactions for ships from Japan and Korea remained steady during this time.

this slowdown signals that U.S. policy proposals are already affecting market dynamics and creating challenges for Chinese-owned vessels before any official changes take place. the U.S. Trade Representative is considering imposing fees that could exceed $1 million per port visit—a move met with resistance from many within the global shipping community.

Burak Cetinok, head of research at arrow Shipping in London, noted a clear preference among buyers for Japanese-built ships over their Chinese counterparts right now. “The difference is evident not just in transaction numbers but also asset values,” he explained. “Most recent sales have favored Japanese construction.”

The initial proposals suggest that charges might soar as high as $3.5 million per vessel under certain conditions, according to Clarkson’s analysis.

Shipowners are adapting leasing agreements to prepare for these potential hefty fees that woudl apply between departure and arrival at U.S. ports.

A representative from Mercuria recently warned at a conference that if these measures go through as planned, they could spell disaster for American grain exports transported via dry bulk carriers.

Cautious Buyers

There’s growing evidence that buyer hesitance is influencing the prices of Chinese-built ships—tho comparing transaction data can be tricky due to limited samples.

Recent figures show a Chinese vessel sold for approximately $5.8 million less than an equivalent Japanese ship last week; prior to the announcement of new tariffs,similar vessels had only seen a $4.8 million price gap based on origin alone. According to SSY brokerage data, discounts on new Chinese bulkers have reached their highest levels as early 2023 compared with those constructed in Japan.

The effects vary depending on ship types; larger Capesize vessels seem less affected since they don’t frequently dock at U.S ports according to cetinok’s insights—creating unique buying opportunities for some investors.
“Those targeting Pacific routes or other non-U.S trades see this price disparity as an attractive chance,” he remarked while noting caution among those reliant on American markets..... . .

A Shift in Orders

The trend isn’t just limited to second-hand sales; there’s also been a noticeable drop-off in orders for smaller bulk carriers being built in China lately.
Bilal Muftuoglu from Howe Robinson Partners pointed out: “In February we saw only one handysize ordered and nothing firm followed up in March—wich is quite unusual.”
He added that during Q1 this year there were 13 such orders placed with Chinese yards compared to 21 coming out of Japan—a reversal of what has been typical recently.“It’s rare,” he concluded.”Japan’s surge over China marks an interesting shift.”