US port fee fails to deter major shippers from Chinese shipyards
Agencies
While a US port fee targeting ships linked to China has made some vessel buyers hesitant, major shipping companies – including Mediterranean Shipping Company (MSC), the world's largest – are opting to continue working with Chinese shipyards, saying their competitiveness cannot be easily matched in the short term.
Despite the United States' determination to challenge China's dominance in global shipbuilding, MSC senior vice-president Marie-Caroline Laurent told the Nor-Shipping Forum in Oslo this week that the port fee would not be a barrier to ordering more vessels from China, the shipping news outlet TradeWinds reported.
She said it was good to see the US trying to revive shipbuilding activity, but 'we will need new vessels with the energy transition'.'Those ships today are built to a large extent in China,'
Laurent said. 'They have the competence, they have the capability, and this is where today we will still continue building our vessels.'
The International Maritime Organisation wants the global shipping industry to achieve net-zero emissions in the next 25 years or so. In response, companies are increasingly investing in decarbonisation technologies – such as green fuels – leading to a notable rise in new ship orders in recent years.
Laurent said any revival of America's shipbuilding sector would not happen overnight, and realising that ambition would require state subsidies and the retention of some strategic assets.
'So this is an interesting conversation to have, also with the US administration,' she said. 'Whether that will change our overall strategy in terms of shipbuilding – probably not at this stage.' MSC, which has its headquarters in Geneva, has vessels under construction at several major Chinese shipyards, including Zhoushan Changhong International Shipyard, Guangzhou Shipyard International and Hengli Heavy Industries.It is not the only shipowner saying that Chinese shipyards are irreplaceable in the near future.
In response to media reports suggesting that major Japanese shipping company Mitsui O.S.K. Lines (MOL) would suspend orders for LNG carriers from China, the company said at the end of last month that it would consider both Chinese and South Korean shipyards.
'Taking the current geopolitical circumstances into account, the company will exercise prudent judgment in selecting shipyards for any new LNG carrier orders,' it said.
'There is only a limited number of shipyards in the world capable of building high-quality LNG carriers to provide stable LNG transportation, and Chinese shipyards are an important partner to ensure diversification and flexibility in procurement sources.' Geopolitical tensions have dampened new vessel orders this year. New orders for vessels with a compensated gross tonnage of 12.6 million were placed in the first four months of the year – down 48 per cent year on year – shipping data provider Clarksons Research said last week.
China secured 54 per cent of those orders, followed by South Korea with 22 per cent.
Recent US trade policies and global tariff actions had 'prompted our customers to adopt a wait-and-see approach, pushing back their ordering decisions', Ren Letian, the chairman of China's largest private shipbuilder, Yangzijiang Shipbuilding, said when the Singapore-listed company released its first-quarter earnings late last month.
By May 22, Yangzijiang had recorded US$290 million in new vessel orders this year – around 5 per cent of its annual target.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Qatar Tribune
20 hours ago
- Qatar Tribune
China's May export growth slows as tariffs take toll
Agencies China's export growth slowed down to a three-month low in May, official data showed on Monday, while shipments to the U.S. also plunged due to tariffs. Coupled with factory-gate deflation, which deepened to its worst level in two years, it pointed the pressure remained high on the world's second-largest economy on both the domestic and external fronts. U.S. President Donald Trump's global trade war and the swings in Sino-U.S. trade ties have in the past two months sent Chinese exporters, along with their business partners across the Pacific, on a roller-coaster ride and hobbled world growth. Underscoring the U.S. tariff impact on shipments, customs data showed that China's exports to the U.S. plunged 34.5% year-over-year in May in value terms, the sharpest drop since February 2020, when the outbreak of the COVID-19 pandemic upended global trade. Total exports from the Asian economic giant expanded 4.8% year-over-year in value terms last month, slowing from the 8.1% jump in April and missing the 5.0% growth expected in a Reuters poll, customs data showed on Monday, despite a lowering of U.S. tariffs on Chinese goods which had taken effect in early April. 'It's likely that the May data continued to be weighed down by the peak tariff period,' said Lynn Song, chief economist for Greater China at ING. Song said there was still front-loading of shipments due to the tariff risks, while acceleration of sales to regions other than the United States helped to underpin China's dropped 3.4% year-over-year, deepening from the 0.2% decline in April and worse than the 0.9% downturn expected in the Reuters poll. Exports had surged 12.4% year-over-year and 8.1% in March and April, respectively, as factories rushed shipments to the U.S. and other overseas manufacturers to avoid Trump's hefty levies on China and the rest of the world. While exporters in China found some respite in May as Beijing and Washington agreed to suspend most of their levies for 90 days, tensions between the world's two largest economies remain high and negotiations are underway over issues ranging from China's rare earths controls to Taiwan. Trade representatives from China and the U.S. are meeting in London on Monday to resume talks after a phone call between their top leaders on Thursday. China's imports from the U.S. also lost further ground, dropping 18.1% from a 13.8% slide in Huang, economist at Capital Economics, expects the slowdown in exports growth to 'partially reverse this month, as it reflects the drop in U.S. orders before the trade truce,' but cautions that shipments will be knocked again by year-end due to elevated tariff levels. China's exports of rare earths jumped sharply in May despite export restrictions on certain types of rare earth products causing plant closures across the global auto supply latest figures do not distinguish between the 17 rare earth elements and related products, some of which are not subject to restrictions. A clearer picture of the impact of the curbs on exports will only be available when more detailed data is released on June 20. China's May trade surplus came in at $103.22 billion, up from the $96.18 billion the previous month. Other data, also released on Monday, showed China's imports of crude oil, coal, and iron ore dropped last month, underlining the fragility of domestic demand at a time of rising external headwinds. Beijing in May rolled out a series of monetary stimulus measures, including cuts to benchmark lending rates and a 500 billion yuan low-cost loan program, aimed at cushioning the trade war's blow to the economy.
Qatar Tribune
20 hours ago
- Qatar Tribune
Starbucks to cut prices in China as competition intensifies
Agencies Starbucks China will reduce the prices of some of its iced drinks by an average of 5 yuan ($0.70) across the country, the company said on Monday, as competition heats up and consumers become more cautious about spending. In a post on its Weixin social media account, the U.S. coffee chain said it would offer more 'accessible' prices on dozens of its drinks, including non-coffee drinks and the Frappuccino, from Tuesday. While China is Starbucks' second-largest market after the U.S., the coffee market is highly competitive and consumers have become more cautious about spending because of the slowing economy and concerns about job security. The new approach means some of Starbucks' drinks will be priced as low as 23 yuan, the post said. Domestic rivals such as Luckin Coffee and Cotti have priced their drinks as low as 9.9 or even 8.8 yuan, while deep-pocketed internet companies and Alibaba Group have entered the food delivery market, adding to the competition. With offers and vouchers, Chinese coffee consumers can buy themselves a drink for as little as 2.9 yuan. A person close to Starbucks said the company was not reducing prices in response to intense price competition, but was looking to attract more customers in the afternoon. The individual requested anonymity as they were not in a role that allowed them to comment to the media. 'Starbucks likely has a longer-term strategy, which is to focus on the demand for non-coffee items in the afternoon among consumers,' the source said. Starbucks had said previously that it would not engage in a price war. However, it has also introduced smaller-sized drinks and issued coupons, which have lowered prices for customers. The U.S. giant has also been looking to revive its business in China by selling stakes.
Qatar Tribune
20 hours ago
- Qatar Tribune
Chinese EVs spark fierce competition in Europe's compact car market
Agencies Some of the world's biggest carmakers are squaring off for a titanic battle over small cars in Europe, as native stalwarts like Volkswagen and Renault fight to maintain their hold on the market against an influx of cheap electric vehicles (EVs) from BYD and its Chinese peers. Last month, BYD, which surpassed Tesla last year as the world's largest EV maker, launched its Dolphin Surf compact hatchback in Europe. The company's most affordable model, known in China as the Seagull, is priced from €22,990 (US$26,128) with a 322km range to €24,990 with a 507km range. A promotion this month lowers the starting price to €19,990. The compact segment was 'the next frontier for electrification in Europe' and had huge potential, said Maria Grazia DaVino, BYD's regional managing director for Europe, at a launch event in Berlin. 'It's a declaration of intentions from BYD that it is exploring the small car segment [in Europe],' said Felipe Munoz, senior analyst at Jato Dynamics. 'It is a very competitive car, and can also shake the small car segment because of its price.' The car's introduction represents a big opportunity for European consumers to 'finally' benefit from a competitive product, he said. 'But it's also an alarm for the European carmakers, which have been struggling to come up with really competitive small cars.' The European EV market has accelerated this year as carmakers strive to meet European Union emissions regulations. New cars and vans must emit 15 per cent less carbon dioxide this year compared with 2021, and the reduction increases to as much as 55 per cent by 2030. Amid this push, EV sales increased 22 per cent year on year in the first four months of 2025, according to data from Rho Motion. Add in the fact that cost parity between small EVs and internal combustion engine (ICE) cars is expected by 2028 or 2029, and the small car market in Europe is set for a revival after struggling since the Covid-19 pandemic. This shift could unlock new EV growth, said Stuart Pearson, global head of automobile equity research at BNP Paribas, in a media briefing last month. European consumers favour smaller EVs for practical reasons as well as environmental and price factors. 'Our cities are old, and the streets are narrow, so we need convenient cars for getting around – products priced under €25,000 that suit the European market,' Vincent Piquet, CFO of Renault Group's EV division Ampere, told the Post last month. A few Chinese-made models, like the Dacia Spring and Leapmotor's T03, are available in Europe for under €20,000. 'The introduction of Chinese OEMs [original equipment manufacturers] has encouraged European OEMs to focus on the development of smaller and more affordable EVs,' said George Whitcombe, a research analyst for Rho Motion. Over the past six months, European carmakers have released several smaller EVs, such as the Puma Gen-E, Renault 4 and Renault 5. Over the next 18 months, the VW ID.2 and Renault Twingo E-Tech will be notable debuts. Japanese and Korean carmakers are also focusing on smaller, more affordable EVs for Europe. The Kia EV2, Nissan Micra and a small EV from Hyundai are all expected to launch in Europe before the end of 2026. While exact prices for all these cars are not yet available, many are expected to start around €25,000. According to Jato Dynamics, small cars accounted for around 20 per cent of new car registrations in Europe in 2024, roughly the same as a year earlier. Matthias Schmidt, an independent European automotive analyst who has studied Chinese brands' prospects in the EU, said the smaller EV segment was set to grow further, with prices moving closer to €20,000. The adoption of cheaper lithium-iron-phosphate battery chemistry, which is already popular in China, would help carmakers cut prices, he added. Compared with Western rivals, Chinese EV makers had a greater ability to cut prices thanks to lower production costs – despite tariffs from the EU and US, Whitcombe said. Companies like BYD also had stronger line-ups of vehicles, allowing them to appeal to a wider customer base, he added. However, Chinese makers would face a challenge as European manufacturers launched more models targeting the low-cost, small EV segment because home-grown marques enjoyed strong brand loyalty, Whitcombe said. BYD increased its market share in Europe to 3.4 per cent so far this year from under 2 per cent in 2024, according to data from Rho Motion. Tesla's share of European EV sales has halved in 2025 from a year earlier. Meanwhile, Chinese companies like BYD and Geely are also making a play in the hybrid EV and ICE segments, in part to navigate the EU's 17 to 35.3 per cent tariffs targeting Chinese-made pure-electric EVs. More than two-thirds of the cars sold by Chinese companies in the first quarter were plug-in hybrids and petrol-powered models, up from just over 50 per cent a year earlier, Rho Motion's data showed. 'The cake will remain the same, but the Chinese will take away market share from the traditional carmakers in those segments,' said Munoz of Jato Dynamics.
