China's lead shrinks! South Korea's shipbuilding industry tops the list for four consecutive months

2021-09-11 09:00

Riding on its advantages in high-end shipbuilding areas such as LNG carriers, South Korea's shipbuilding industry continues to make strides, maintaining its top position in the new ship order rankings in August with a 57% global market share, marking four consecutive months at the top. Although China's shipbuilding industry still leads in cumulative order intake this year, its lead is narrowing.

According to the latest data from Clarkson, 49 new ship orders totaling 1.37 million CGT (corrected gross tonnage) were concluded globally in August. Of these, South Korea accounted for 16 vessels totaling 780,000 CGT, representing a 57% global market share, a 12 percentage point increase from the previous month; China followed closely with 23 vessels totaling 370,000 CGT, representing a 27% global market share, a 17 percentage point decrease from the previous month; Japan ranked third with 7 vessels totaling 190,000 CGT, representing a 14% global market share, a 4 percentage point increase from the previous month.

South Korean industry insiders stated that while the number of new ship orders received by South Korea's shipbuilding industry in August was lower than China's, the CGT value was more than double that of China. The average tonnage per vessel reached 48,750 CGT, compared to China's 16,086 CGT, indicating that South Korea mainly undertakes large, high-end vessels.

As of August this year, the global cumulative new ship order intake reached 32.39 million CGT, a 165% increase compared to 12.21 million CGT in the same period last year. Among them, China's cumulative order intake was 526 vessels totaling 14.53 million CGT, a year-on-year increase of 158%, representing a 45% global market share and maintaining its world's leading position; South Korea's cumulative order intake was 329 vessels totaling 13.66 million CGT, representing a 42% global market share, closely following China.

South Korean industry insiders stated that since the beginning of this year, 38 large LNG carriers of over 140,000 cubic meters have been concluded globally, with South Korea undertaking 37 of them, accounting for a remarkable 97%, demonstrating the unparalleled competitiveness of South Korean shipbuilders in this type of vessel. Simultaneously, South Korea also holds an advantage in the large container ship market. If the LNG carrier orders for large LNG projects in regions such as Russia and Qatar are officially signed, it is expected that South Korea's cumulative order intake this year will soon surpass China's.

Looking at the new ship order volume for various vessel types, in the first eight months of this year, the main vessel types built by South Korean shipbuilders are showing an increasing trend. Specifically, VLCC orders increased by 137% year-on-year, aframax tankers increased by 36% year-on-year, large LNG carriers over 140,000 cubic meters increased by 104% year-on-year, and large container ships of 12,000 TEU and above saw a staggering increase of over 1400% year-on-year.

As of the end of August this year, the global backlog of new ship orders stood at 84.68 million CGT, a slight decrease of 600,000 CGT compared to the end of July. By country, China's backlog of new ship orders was 32.59 million CGT, accounting for 39%; South Korea's was 28.33 million CGT, accounting for 34%; and Japan's was 9.56 million CGT, accounting for 11%. Compared to the same period last year, South Korea's backlog of new ship orders increased by 8.67 million CGT, a 44% increase, ranking first in growth; China increased by 4.72 million CGT, a 17% increase; and Japan decreased by 1.36 million CGT, a 12% decrease.

Along with the increase in orders, newbuilding prices have also continued to rise. In August, the Clarkson Newbuilding Price Index rose by 2 points from the previous month, reaching 145.8 points.

Looking at the price trends of various vessel types, VLCCs are priced at US\$103.5 million, an increase of US\$1.5 million from the previous month; 13,000-14,000 TEU container ships are priced at US\$141 million, an increase of US\$2.5 million from the previous month; Suezmax tankers are priced at US\$70.5 million, and aframax tankers are priced at US\$56.5 million, both showing increases; in particular, 174,000 cubic meter LNG carriers increased by US\$2 million from the previous month, reaching US\$198 million, and are about to break the US\$200 million mark. (Wang Chu)

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