One ship equals three? Competition between Chinese and South Korean shipbuilding industries focuses on order volume and value
2022-08-15 09:00
Since the beginning of this year, South Korea's shipbuilding industry has consistently ranked first globally in monthly order intake. In the first seven months, the three major South Korean shipbuilders received a combined order value of US$30.52 billion (approximately RMB 205.7 billion), exceeding the total for the entire previous year. With the increasing global demand for green ships and LNG carriers, the competition between China and South Korea's shipbuilding industries is shifting from traditional ship types to high value-added vessels, intensifying the rivalry between the two countries.
According to data released by Clarkson Research Services on August 9, in the order battle of July this year, the South Korean shipbuilding industry secured orders for 19 new vessels totaling 1.16 million corrected gross tons (CGT), accounting for 55% of the global total of 70 vessels and 2.11 million CGT, surpassing China's 35 vessels and 0.62 million CGT to maintain its global lead.
According to data released by South Korea's Ministry of Trade, Industry and Energy on August 10, a total of 72 new vessels were ordered globally in July, with all 12 large LNG carriers (1.03 million CGT) ordered being secured by South Korean shipbuilders. Of the 25 (1.27 million CGT) environmentally friendly vessels ordered globally in July, South Korean shipbuilders secured 12 (1.03 million CGT), representing a remarkable 81% share. According to the Ministry, in terms of contract value, new vessel orders totaled US$5.3 billion globally in July, with South Korean shipbuilders accounting for US$3 billion. The average price per vessel reached US$158 million, resulting in a market share of 57%.
South Korean industry insiders point out that while South Korean shipbuilders only secured 19 orders in July, only 51% of China's 37 orders, the majority of orders secured by Chinese shipbuilders were for smaller vessels. Therefore, in terms of CGT, China only reached 53% of South Korea's total. China's market share was 30%, and in terms of contract value, China only reached US$1.5 billion, 50% of South Korea's total, with a market share of 29%. The average price per vessel was only US$42.86 million, less than one-third of South Korea's.
South Korean industry insiders attribute this discrepancy between the number of new vessel orders, tonnage, and value to the increased demand for high value-added vessels such as large LNG carriers, and environmentally friendly vessels using alternative fuels like LNG or methanol, areas where South Korea's shipbuilding industry holds a strong advantage.
Since the beginning of this year, South Korea's shipbuilding industry has consistently ranked first globally in monthly order intake. In the first seven months, the three major South Korean shipbuilders received a combined order value of US$30.52 billion (approximately RMB 205.7 billion), exceeding the total for the entire previous year. With the increasing global demand for green ships and LNG carriers, the competition between China and South Korea's shipbuilding industries is shifting from traditional ship types to high value-added vessels, intensifying the rivalry between the two countries.
According to data released by Clarkson Research Services on August 9, in the order battle of July this year, the South Korean shipbuilding industry secured orders for 19 new vessels totaling 1.16 million corrected gross tons (CGT), accounting for 55% of the global total of 70 vessels and 2.11 million CGT, surpassing China's 35 vessels and 0.62 million CGT to maintain its global lead.
According to data released by South Korea's Ministry of Trade, Industry and Energy on August 10, a total of 72 new vessels were ordered globally in July, with all 12 large LNG carriers (1.03 million CGT) ordered being secured by South Korean shipbuilders. Of the 25 (1.27 million CGT) environmentally friendly vessels ordered globally in July, South Korean shipbuilders secured 12 (1.03 million CGT), representing a remarkable 81% share. According to the Ministry, in terms of contract value, new vessel orders totaled US$5.3 billion globally in July, with South Korean shipbuilders accounting for US$3 billion. The average price per vessel reached US$158 million, resulting in a market share of 57%.
South Korean industry insiders point out that while South Korean shipbuilders only secured 19 orders in July, only 51% of China's 37 orders, the majority of orders secured by Chinese shipbuilders were for smaller vessels. Therefore, in terms of CGT, China only reached 53% of South Korea's total. China's market share was 30%, and in terms of contract value, China only reached US$1.5 billion, 50% of South Korea's total, with a market share of 29%. The average price per vessel was only US$42.86 million, less than one-third of South Korea's.
South Korean industry insiders attribute this discrepancy between the number of new vessel orders, tonnage, and value to the increased demand for high value-added vessels such as large LNG carriers, and environmentally friendly vessels using alternative fuels like LNG or methanol, areas where South Korea's shipbuilding industry holds a strong advantage.
A relevant person from South Korea's Ministry of Trade, Industry and Energy stated: “With the increasing demand for environmentally friendly vessels driven by the International Maritime Organization's new environmental regulations and the increased demand for LNG due to the Russia-Ukraine conflict, the order intake of South Korean shipbuilders, particularly for environmentally friendly vessels and LNG carriers, is expected to continue its positive momentum in the second half of this year. In particular, with the increase in the order backlog of South Korean shipbuilders, the possibility of selective order acceptance considering profitability is increasing, and the profit structure of each company is also expected to improve in the second half of the year.” (Wang Chu)
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