Yangzijiang Shipbuilding Terminates $180 Million Tanker Contract Over US Sanctions Concerns

Yangzijiang Shipbuilding Holdings Ltd has terminated contracts for four 50,000DWT MR oil tankers worth approximately US$180 million after discovering its buyer may be involved in circumventing U.S. sanctions laws and regulations.

In a stock exchange announcement, Singapore-listed Yangzijiang stated that its three subsidiaries – Jiangsu Yangzijiang Shipbuilding Group Co., Ltd, Jiangsu New Yangzi Shipbuilding Co., Ltd, and Jiangsu Yangzi Xinfu Shipbuilding Co., Ltd – terminated the contracts following “certain critical information just disclosed by the Buyer” that had not been previously known despite extensive due diligence.

“This critical information contains allegations that the Buyer’s sole shareholder was involved in a scheme to circumvent U.S. sanctions laws and regulations,” the company stated in its filing.

The four tankers were scheduled for delivery between 2026 and 2027. Construction had commenced on only one vessel, for which the company had collected a 10% installment of US$4.48 million, in addition to the initial 10% deposit (US$18 million) received at contract signing.

The Chinese shipbuilder noted that “no revenue or profit relating to the Contracts was recognised up to 30 June 2025” and that the termination “is not expected to have a material impact on the net tangible assets and earnings per share of the Company and the Group for the current financial year ending 31 December 2025.”

This contract termination comes as Chinese shipbuilders navigate complex geopolitical waters. The U.S. Trade Representative policy introduced in April 2025 established a tiered fee structure on Chinese vessels and operators calling at U.S. ports, part of broader efforts to challenge China’s maritime dominance and boost American shipbuilding.

Despite these headwinds, Yangzijiang has continued to secure new orders. In a separate announcement, the company revealed it had secured additional shipbuilding contracts for eight vessels worth US$440 million scheduled for delivery between 2027 and 2029. This brings Yangzijiang’s year-to-date total to forty-four effective shipbuilding contracts with an aggregate value of US$1.90 billion.

According to HSBC Global Investment Research, Yangzijiang’s shares have fully recovered from setbacks triggered by U.S. trade policy changes targeting Chinese-built ships, with recent order wins helping to alleviate market concerns about potential U.S. trade-related headwinds.

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