Rising steel prices are putting the squeeze on Chinese shipbuilders, prompting several small companies to delay or scrap contracts that were signed a year ago.
The delays, however, risk jeopardising the reputation of the mainland shipbuilding industry.
Market watchers said Chinese shipyards could lose future business by trying to renegotiate contracts to cover unanticipated higher materials costs.
'[Increasing steel prices are] a big problem for us. We saw our steel cost double this year,' a senior official from China State Shipbuilding Corp (CSSC) said. 'Not only are our margins squeezed, we have run a loss on some projects.'
New orders at mainland shipyards surged 182 per cent last year to 18.5 million deadweight tonnes (dwt), the People's Daily reported.
Orders at CSSC alone tripled to more than seven million dwt last year. This doubled its order book to 10.2 million dwt and will keep it busy for at least three years.