Which news gave China Rongsheng Heavy Industries’ shares the bigger trouncing yesterday: US regulators freezing assets owned by chairman Zhang Zhirong relating to an insider trading probe, or a profits warning? Answer: it should not have been the former, because there is plenty else to fret about in shipbuilding.

Like a hangover sufferer wincing with every movement or new noise, it is not as if the industry and its investors did not know what is hurting them: they are still suffering the aftermath of an almighty boom in shipbuilding. Rongsheng said yesterday that it expects first-half profits to “decrease significantly”. It did not quantify the damage, leaving investors free to surmise the worst. Barclays, for example, had already assumed a one-quarter drop in the company’s full-year profits. Little wonder shares dropped 16 per cent.

Rongsheng’s reasons were bang on trend, namely a sharp drop in orders and prices compared with last year. Globally, new ship orders are down almost three-fifths this year, according to Nomura. Margins are clearly under pressure: prices of new container ships (Chinese yards’ speciality) have fallen 15 per cent in the past year, says Barclays, while the cost of buying second-hand ships has dropped three times as fast.