Since 2024, several private shipyards such as Yangzijiang Shipbuilding (Holdings) Ltd. (Yangzijiang Shipbuilding), Hengli Heavy Industry Group Co., Ltd. (Hengli Heavy Industry), and Jiangsu New Times Shipbuilding Co., Ltd. (New Times Shipbuilding) have been approved to construct new docks, marking the beginning of capacity expansion.
While Yangzijiang Shipbuilding drove the first pile for its green energy base, Hengli Heavy Industry revived the abandoned STX (Dalian) shipyard, which had lain dormant for nearly a decade, propelling it to become the world’s fourth-largest shipyard by 2024. A similar script was followed by Nantong Xiangyu Marine Equipment Co., Ltd. and Jiangsu Guoxin Group, as several “zombie shipyards” were rapidly revitalized through acquisitions, technical upgrades, and order lock-ins, joining the capacity race.
Orders are the common fuel for this collective expansion. According to Clarksons’ data, as of June 2025, Yangzijiang Shipbuilding, New Times Shipbuilding, and Xin Hantong Shipbuilding hold 157, 158, and 72 orders respectively, with schedules extending as far as 2030. The recovery of the global shipbuilding market, coupled with premiums for green vessels, has convinced private shipowners that “orders guarantee the future.” However, concerns are also growing: Clarksons estimates that 2025–2027 will remain a “tight balance,” but if large-scale “greenfield” expansions occur, oversupply could emerge post-2028.
Thus, the real competition has shifted from “building docks” to “utilizing docks.” Yangzijiang Shipbuilding has dedicated its new 300,000-ton dock to green methanol, ammonia, and liquefied natural gas (LNG) routes, simultaneously equipping it with an LNG receiving terminal to transform the wharf into an energy distribution hub. New Times Shipbuilding reserved space in its dock design for retrofitting wind turbine installation vessels, enabling a swift pivot if container ship demand wanes. Hengli Heavy Industry converted STX’s old dock into an intelligent block workshop to counter cyclical downturns with efficiency. Expansion is just the prelude—the key for private shipyards to maintain their edge lies in converting new capacity into green cash flow before the next downturn arrives.
Private Shipyards Expand Capacity to Cash In
In recent years, multiple private shipyards have expanded capacity by constructing new docks, reviving “zombie” shipyards, and extending floating docks, aiming to capitalize on the “super cycle.”
From 2024 to the first half of 2025, several private shipyards ramped up production. Yangzijiang Shipbuilding (Holdings) Ltd. (Yangzijiang Shipbuilding; BS6.SGX) broke ground on its green energy base in August 2024, adding a 300,000-ton dry dock. Hengli Heavy Industry Group Co., Ltd. (Hengli Heavy Industry) officially launched its Phase II “Future Factory” in early 2025, constructing two large dry docks. Jiangsu New Times Shipbuilding Co., Ltd. (New Times Shipbuilding) received approval from the Jiangsu Development and Reform Commission in May 2025 for a new 300,000-ton dry dock—the first large dock approved in China since 2013. The combined annual capacity additions from these three private shipyards exceed 8 million DWT. Others expanded capacity by extending docks, restarting old slipways, or enlarging floating docks.
The global shipbuilding market’s recovery and ample order backlogs at China’s key monitored shipbuilders have driven private players to boost capacity, but underlying risks persist.
Ups and Downs: The Shipbuilding Cycle
Shipbuilding is a classic long-cycle industry where “time trades for space.” Since 2008, China’s shipbuilding sector has weathered cycles of “peak—collapse—consolidation—recovery—renewed boom.”
In May 2008, the Baltic Dry Index (BDI) surged to a historic high of 11,793 points, fueling a global shipbuilding frenzy where “10,000-ton slipways were in short supply.” Seven months later, the financial crisis struck, plunging the BDI to 663 points—a 94% drop.
From 2011 to 2016, the industry endured a “decade-long winter,” with severe supply-side consolidation. WTO data shows global trade growth slowed from 5.5% in 2007 to below 3% annually in 2012–2016. Fleet overcapacity peaked, with Clarksons reporting a record 55.1 million DWT of vessels scrapped in 2012. China’s active shipyards dwindled from 391 in early 2009 to 140 by 2016, as private giants like China Rongsheng Heavy Industries Group (now Jiangsu Xinrong Heavy Industries, or Xinrong Heavy Industries), STX (Dalian) Shipbuilding Co., Ltd. (STX Dalian), and Ouhua Shipbuilding went bankrupt or halted operations.
China’s Newbuilding Price Index (CNPI) bottomed at 125 points in Q1 2016, just 65% of its 2008 peak. In 2013, the State Council issued the “Shipbuilding Industry Restructuring and Upgrade Plan,” imposing a five-year moratorium on new dock approvals. The Ministry of Industry and Information Technology’s 2015 “white list” further accelerated the exit of zombie capacity.
By 2020, a tepid recovery began, accompanied by rising industry concentration. Data from the China Association of the National Shipbuilding Industry showed the top 10 shipyards accounted for 70.6% of completions, up 13.7% from 2016.
The 2021–2023 COVID-19 pandemic ignited a “super boom.” Container shortages, coupled with restocking demand for tankers and bulk carriers, drove global new orders to 123 million DWT in 2021, an 82% year-on-year increase (Clarksons). The CNPI rebounded to 160 points in Q4 2022, nearing 93% of its 2008 high. In 2023, China’s share of global new orders, completions, and order backlogs all exceeded 50% for the first time.
Since 2024, green transition and geopolitical premiums have deepened the cycle. With the IMO’s Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) in force, the organization predicts a 25-year vessel scrapping peak from 2026–2029. Meanwhile, Red Sea route disruptions boosted ton-mile demand, prompting Chinese yards to “cherry-pick” orders. Green vessel premiums reached 5%–15%, and leading private shipyards’ schedules are booked through 2027–2030. After a decade-long hiatus, China resumed approvals for new docks.
Industry insiders note the key difference between this cycle and 2008 lies in supply elasticity. The earlier expansion relied on “land + credit,” adding over 400 docks, whereas this round is led by “private leaders + capital markets,” swapping land financing for equity with longer debt maturities and higher concentration. If demand falters, private shipyards will feel the chill first—this “gray rhino” may arrive more stealthily and violently.
Capacity Expansion: How Private Firms Are Doubling Down
Per Ministry of Industry and Information Technology statistics, despite cyclical volatility from 2009–2020, China’s shipbuilding output, new orders, and order backlogs maintained stable global market shares (see Table 1). As of 2024, China has led the world in all three metrics for 15 consecutive years.
Beyond these metrics, since 2021, China has also advanced in green and high-end vessel segments.
In green-powered vessels, Chinese builders dominate 78.5% of orders across LNG, methanol, and ammonia fuel routes (Clarksons). Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. (Hudong-Zhonghua) secured 24 Qatari 271,000-cubic-meter ultra-large LNG carriers under the “100-ship program,” making China the global leader in cargo capacity. The first domestically built large cruise ship, “Adora Magic City,” and the world’s largest 7,000-car LNG dual-fuel PCTC were delivered ahead of schedule. Offshore equipment orders totaled 108 units worth $18.6 billion, claiming 69.4% of the global market for a seventh straight year. This dual triumph in scale and technology sets a bullish tone for capital and capacity expansion.
Riding this momentum, private shipyards leverage a “technology—capital—capacity” chain to fuel growth. Technologically, Yangzijiang Shipbuilding delivered China’s first privately built 175,000-cubic-meter LNG carrier and won VLEC and VLAC orders. Its clean energy vessel ratio hit 74%, with orders booked through 2030 (Clarksons). New Times Shipbuilding upgraded its 500,000-ton, 300,000-ton, and 100,000-ton docks into smart production lines via a ¥5 billion new energy vessel project, focusing on VLECs and polar multipurpose heavy-lift vessels. Hengli Heavy Industry revived its Phase II base on Dalian’s Changxing Island, integrating cryogenic high-pressure cargo handling, CO2 transport, and methanol dual-fuel systems into its inaugural vessel specs. High-end vessel applications unlocked methanol and ammonia fuel markets overnight, empowering private yards to negotiate alongside Korea’s Big Three and European cruise giants.
Capital marketization followed. In May 2025, Hengli Heavy Industry listed via Guangdong Songfa Ceramics Co., Ltd. (*ST Songfa; 603268.SH), becoming this cycle’s first IPO-successful private shipyard. Its ¥11 billion expansion plan was written into the prospectus, using secondary market liquidity to “lever up” physical capacity—marking the first full “shipbuilding profits—listing platform—refinancing”闭环 for private yards.
Capacity expansion is the final leverage point (see Table 2). Yangzijiang’s Jingjiang-based Yangzi Hongyuan Green High-Tech Clean Energy Shipbuilding Base, internally dubbed “rebuilding Yangzijiang,” involves Phase I investments of ¥3 billion across 1,320 meters of Yangtze shoreline and 1,300 acres. It will add a 300,000-ton dry dock, a 200,000-ton outfitting wharf, and a 100,000-ton turning basin, targeting 800,000 DWT annual capacity by late 2026 and over ¥10 billion in annual output.
As mentioned earlier, private shipbuilding giant New Times Shipbuilding has launched a 5-billion-yuan intelligent new energy shipbuilding project in Jingjiang Economic and Technological Development Zone, planning to construct a new 300,000-ton dry dock capable of simultaneously building two VLCCs or two 10,000-TEU container ships side by side. The project also includes smart manufacturing workshops, a 110kV substation, an LNG gasification station, and large gantry cranes, among other supporting facilities. It is expected to be completed and operational by 2026, adding an annual capacity of approximately 500,000 compensated gross tons (CGT) for the company.
In February 2025, Jiangsu Hantong Ship Heavy Industry Co., Ltd. (New Hantong Shipbuilding) signed an agreement to establish a high-end offshore equipment intelligent manufacturing base project, primarily producing various large high-value-added offshore modules. Upon reaching full capacity, it will produce over 100,000 tons of high-end marine equipment annually, with an annual output value of about 3.5 billion yuan.
Among smaller-scale but equally representative new capacity projects, Zhoushan Xintai Offshore Technology Co., Ltd. (Xintai Offshore) plans to build a new 300,000-ton dock and supporting wharf, utilizing 156.6 meters of deep-water shoreline. The project was approved by the Ministry of Transport in May 2025.
Jiangmen Yinxing Ship Engineering Co., Ltd. (Yinxing Shipbuilding) plans to establish a 35,000-ton dock and two 1,000-ton wharves in Guanghaiwan Economic Development Zone, capable of constructing four 35,000-ton bulk carriers annually. These new docks not only expand the hardware boundaries of private shipbuilders but also mark the policy-level reopening of approvals for private capital to build new docks since 2013.
For the “secondary development” of existing facilities, Wison Offshore & Marine chose to “expand” at its old site, lengthening the existing 290-meter dock at its Nantong base to 370 meters and simultaneously constructing a new 2,000-ton gantry crane. This transforms the facility, originally capable of only building small and medium-sized modules, into a comprehensive dry dock capable of constructing ultra-large modules and ships.
The “restart faction” has turned its attention to dormant assets. Hengli Heavy Industry has become a benchmark for private shipyard expansion with its “zombie capacity revival + massive expansion” model. After acquiring the idle STX Dalian shipyard assets through auction, it took only five months to complete dredging, equipment restoration, and environmental upgrades for the first-phase plant, which is now officially operational.
In 2025, the second-phase plant was also completed, adding two 300,000-ton large dry docks and four 2,000-ton gantry cranes, enabling the production of high-value-added products such as VLCCs, VLGCs, ultra-large container ships, and FPSOs (floating production storage and offloading vessels). China Rongsheng Heavy Industries Group Co., Ltd., which became a “zombie” shipyard after the market collapse a decade ago, has restarted under the name New Rongsheng Heavy Industry. Registered in May 2024, New Rongsheng Heavy Industry changed its operational status from “suspended” to “active,” supported by an 8+4 order for LNG dual-fuel 11,000–12,000 TEU container ships confirmed by Mediterranean Shipping Company (MSC). The shipyard is currently dredging and maintaining equipment for its remaining No. 1 and No. 4 large dry docks. Dock No. 4 (580m × 138.5m, with a 1,600-ton gantry crane) can simultaneously build two 400,000-ton VLOCs (very large ore carriers) and may become the core production line after the restart.
In 2024, Xiangyu Shipbuilding acquired the core assets of bankrupt private shipbuilder Jiangsu Hongqiang Ship Heavy Industry Co., Ltd. (Hongqiang Ship Heavy Industry) through judicial auction, including three 50,000–100,000-ton slipways, one wharf, and 682.3 meters of Yangtze River shoreline rights. It also plans to invest 500 million yuan to add over 600 sets of lifting, laser cutting, and environmental protection equipment, along with supporting dormitories and substations, to meet the batch production demands of high-end clean-energy vessels such as Newcastlemax bulk carriers and stainless steel chemical tankers.
Additionally, Huaxing Shipping Co., Ltd. (Huaxing Shipping) filed a 500-million-yuan expansion project to build smart workshops, a 10,000-ton floating dock, and extended slipways. The relocation and technical upgrade project of Hengxian Haitang Shipyard (Haitang Shipbuilding) will upgrade two 5,000-ton slipways in the old plant to one 30,000-ton semi-dock slipway to meet the construction needs of coastal wind power operation and maintenance mother ports and feeder container ships. These coordinated actions—whether new builds, upgrades, or restarts—have enabled China’s private shipbuilders to transition from “following” to “running alongside” or even “leading” in this supercycle. According to Clarksons, orders received by Chinese private shipyards doubled in 2024, accounting for 52% of total orders received by Chinese shipbuilders, making them the most active source of incremental growth in the global shipbuilding industry.
Potential Crisis: Shadows Under Expansion
Industry insiders told Shipping Exchange Gazette that despite the current supercycle, there are still some concerns worth noting.
Looking back at the last shipbuilding crisis, it began with an external shock—the bankruptcy of Lehman Brothers triggered the international financial crisis, causing freight rates to plummet and shipowners’ cash flows to collapse, with prepayment ratios dropping sharply from 60–80% to 30–50%. Today, the Russia-Ukraine conflict and the Red Sea shipping crisis similarly constitute external shocks, albeit in the form of “geopolitical” pressure rather than a “financial tsunami.” If freight rates plummet again due to concentrated capacity releases, highly leveraged shipowners may still face “technical defaults.”
Insiders noted that the fatal weakness of private shipyards back then was “low down payments + high debt”: shipowners only needed to pay 20% prepayment to secure berths, while shipyards had to advance 80% of the cash flow, with bank guarantees serving as a lifeline. When ship prices fell below bank reassessment lines, guarantees could not be renewed, leading to shipowners abandoning orders and shipyards bleeding capital. Today, some shipbrokers reveal that certain private shipyards have raised prepayment ratios to 40–60% and secured capital through listed platforms, convertible bonds, and REITs (real estate investment trusts). However, green ship premiums are as high as 15–20%, and if green fuel technologies evolve or policies shift, locked-in high-price orders could still trigger reassessments. Once green premiums disappear, the mismatch between market value and assets for shipyards betting heavily on green shipbuilding could be even more severe than Rongsheng Heavy Industry’s “delisting” outcome.
The fragility of labor and supply chains is also repeating. Since 2024, shipyards in Jiangsu and Zhejiang have reported shortages of welders and pipefitters at 15–20%. The last overcapacity cycle led to widespread closures of supporting factories, causing shortages of crankshafts, rudders, and scrubbers. This time, key components like green fuel engines, double-walled stainless steel pipes, and Type B fuel tanks remain controlled by a few companies in Europe, the U.S., and South Korea, meaning geopolitical or trade barriers could choke shipyards at any time.
The biggest similarity between the current hidden crisis and the last shipbuilding downturn is the concern over “demand overdraft.” In 2007, global new ship orders totaled 270 million DWT, but the average for the next five years was less than 100 million DWT, creating a decade-long “order vacuum.” From 2021 to 2024, global annual orders averaged 120 million DWT, nearing the 2008 peak. If green fleets are delivered en masse in 2026–2028 while trade growth returns to the 2–3% norm, the gap between capacity growth and demand growth could widen by 2–3 percentage points again. By then, private shipyards’ high-price berths may face the dilemma of “delivery equals depreciation,” and the high valuations given by capital markets could backfire.
Another potential shock not to be ignored comes from the U.S. Section 301 investigation targeting China’s maritime, logistics, and shipbuilding industries.
Although the 301 investigation has not yet been formally implemented, its “psychological effect” on China’s shipbuilding market has already emerged, particularly in financing and leasing. To avoid U.S. port fees, shipowners have begun large-scale early redemptions of Chinese leasing financing. Banks such as DNB, Citigroup, and First Citizens confirm that for ships built in Japan or South Korea with Chinese leasing involvement, shipowners are “almost immediately” seeking alternative refinancing to decouple from Chinese capital. Chinese leasing’s share in shipping finance is being redistributed among European and American banks, Korean policy financial institutions, and Japan’s Sumitomo Mitsui, indirectly weakening Chinese shipyards’ ability to secure orders through the “shipowner + leasing” model.
Today, leading private shipyards possess “financing firewalls” and “technological moats” that were absent in the last cycle. Their technological reserves in green dual-fuel, smart hulls, and digital twins also give them a first-mover advantage in technological iterations.
But history shows that even the thickest firewall cannot withstand a long-term downward shift in the demand curve. As long as freight rates and ship prices adjust by 20–30%, highly leveraged private shipyards will still be the first to feel the chill.
The future of shipbuilding belongs to those helmsmen who dare to remain cautious even at the peak of prosperity and who are willing to leave room for the future amid expansion waves. Only when every new dock corresponds to a sustainable demand curve, and every steel plate carries cash flow resilient to the next storm, can China’s private shipyards truly navigate out of cyclical whirlpools and forge today’s order peaks into tomorrow’s industrial plateaus.
