Published by: Zihuan Pan, Jessica Long 24 Apr 2025 @ 05:55 UTC
United States President Donald Trump’s proposed imposition of steep fees on Chinese-made ships is unlikely to take their toll on China’s shipbuilding sector due to sufficient orders Chinese shipyards hold, sources told Fastmarkets during the week to Thursday April 24. China led three major shipbuilding indicators globally for a 15th straight year in 2024, data from China’s Ministry of Industry and Information Technology (MIIT) showed in January.
In 2024, China’s shipbuilding completion volume accounted for 55.7% of the global total. New orders Chinese shipbuilders received accounted for 74.1% of global volume and orders on hand accounted for 63.1%, according to the MIIT.
Low steel costs, efficient supply chains and significantly lower labor costs, among other advantages, will keep Chinese shipyards the go-to choice for international clients. A Chinese-made container ship costs approximately $60 million, compared with $330 million for a similar vessel built in the US, a Chinese industry analyst said.
Resilient shipbuilding keeps steel plate underpinned
[Chinese] shipyards win a large number of global orders, with deliveries as far off as 2028, which resultantly will keep steel plate prices solid, a Chinese trader said, adding that Chinese steel plate prices have outperformed other common steel products thanks to resilient demand from sectors such as shipbuilding, electric vehicles and wind farms.
Prices for shipbuilding steel plates remained the most resilient among various plates amid ample orders. Orders for plates used in shipbuilding from a Chinese mill have maintained growth in March to May, a second Chinese trader told Fastmarkets.
Steel accounts for 20-30% of the costs for building a ship, according to market participants. The latest data from the China Iron & Steel Association (CISA) shows that production of steel plates for shipbuilding among 36 Chinese steelmakers increased by 28.9% from a year earlier to 5.02 million tonnes in the first three months of 2025.
Fastmarkets’ weekly price assessment for steel plate domestic, ex-whs Eastern China was 3,400-3,420 yuan ($466-469) per tonne on Friday April 18.
Its premiums over Fastmarkets’ price assessment for steel hot-rolled coil domestic, ex-whs Eastern China, came in at 195 yuan per tonne on that day, much larger than 35 yuan per tonne three months earlier on January 17.
Chinese steel prices have been subdued by Trump’s tariff plan, escalating trade tensions between Washington and Beijing, tepid seasonal demand in China, trade defense measures against Chinese steel exports from various regions, and concerns over Beijing’s clampdown on exports of non-value added tax (VAT) cargoes in recent months, sources told Fastmarkets.
The impact from Trump’s proposed port fees on Chinese ships was more on market sentiment in the near term, sources said.
Tungsten market remains robust amid strong shipbuilding demand
The global tungsten market continues to find solid support from the thriving shipbuilding industry, with demand for hard alloys remaining robust, sources said.
Tungsten, a critical raw material in machinery and marine engineering, is essential for producing wear-resistant parts and cutting tools used in ship construction.
With major shipyards in China, South Korea and Europe ramping up production to meet growing orders, there will be sustained demand for tungsten in the coming quarters, according to a second industry analyst.
Rising consumption from the shipbuilding sector, coupled with limited supply growth, is keeping tungsten prices well-supported, sources said.
Fastmarkets’ weekly price assessment for tungsten concentrate 65% WO3, in-whs China was 145,500-150,000 yuan per tonne on Wednesday April 23, up by 2,500-4,500 yuan per tonne from 143,000-145,500 yuan the preceding week.
China, the world’s largest tungsten producer, has maintained strict output controls and imposed export controls on the material since February 3, while geopolitical tensions continue to disrupt raw material flows, sources said.
Market participants said that with shipbuilders prioritizing durable materials for next-generation vessels, tungsten’s role in strengthening steel alloys ensures its market stability.
Given China’s leading shipbuilding volume and orders in recent years, the demand for high performance alloys and tungsten raw material will continue to remain strong, a China-based tungsten source said.
US scales back port fee plan
Market concerns over Trump’s proposed port fees on Chinese ships were also softening following his administration’s scale-back.
The Trump administration on Thursday April 17 announced fees on Chinese-built vessels, with a service fee of up to $1.5 million on Chinese-built vessels, and a service fee of up to $1 million on each Chinese-owned operators.
But they have scaled back their scope, including exemptions for smaller ships and certain types of vessels, such as those carrying bulk exports of coal and grain, according to reports from various media outlets.
On the other hand, Trump on Tuesday April 22 indicated that final tariffs on Chinese exports to the US won’t be anywhere near as high as 145%, though he added that the duties won’t be 0%. His administration also said that it was setting the stage for a deal with China on trade.
These comments sparked optimism that US-China trade tensions could ease and bolstered Chinese steel prices on Wednesday April 23.
The most-traded HRC contract on the Shanghai Futures Exchange hit a one-week high of 3,243 yuan per tonne in the final 30 minutes before closing bell on Wednesday.