China based Yangzijiang Shipbuilding fell as much as 2.9 percent in starting trade on 30th June to hit a 14-week low on concerns of tighter operating margins due to higher cost for steel, dealers said.

According to research based report of DBS Vickers, the 85-96 percent increase in Australian iron ore prices would drive up cost structure for steel mills, and assert further pressure on newbuild prices for bulkers and containerships given the higher cost structure. Moreover, Chinese yards have yet to feel the full impact of annual increase in prices for coking coal and iron ore.

The brokerage firm advised investors to avoid Chinese yards like Yangzijiang.