Evergreen jv for Chinese yard shelved

Container Liner Evergreen Marine's (pictured) parent, Evergreen Group, has shelved a plan to invest in a Chinese shipyard due to weak market conditions, writes Reuters. Evergreen had intended to form a shipbuilding joint venture in the southern Chinese port city of Quanzhou with the local government.

With the change of the market, current timing is not good to diversity into shipbuilding industry, the company said in a written reply to Reuters' questions. As a result, the plan to invest in a shipyard has been shelved.

The planned shipyard reportedly would have had the capacity to make ships of 350,000 tonnes and would have been ready to start production in 2011. However, orders for new ships slowed worldwide in the past year as rising energy prices and increasing capacity put pressure on the margins of global container shipping firms.

The market outlook is expected to worsen in the second half on rising costs and global economic uncertainty, analysts and industry executives say.