China returns to the top! The year-end "order grabbing war" between China and South Korea's shipbuilding industries intensifies.

In October, Chinese shipbuilders once again surpassed South Korean shipbuilders in new order volume, exceeding them by 11 percentage points. Since the beginning of the year, the shipbuilding industries of China and South Korea have engaged in a fierce competition for new ship orders. As the year draws to a close, with the continuous emergence of high value-added ship orders such as LNG carriers, the "order grabbing" battle between Chinese and South Korean shipbuilders is becoming increasingly intense in their pursuit of the annual order champion title.

According to the latest data released by Clarkson Research Services on November 8, the global new ship order volume in October totaled 75 vessels with 3.41 million CGT, a year-on-year increase of 19%. Among them, Chinese shipbuilders received orders for 32 vessels totaling 1.8 million CGT, accounting for 53% of the global order volume and ranking first; South Korean shipbuilders received orders for 22 vessels totaling 1.43 million CGT, with a market share of 42%, ranking second.

In response, South Korean industry insiders stated that typically, even if South Korea significantly lags behind China in the number of new ship orders, the gap in market share is not usually that large. However, in October, China significantly widened the gap in both new ship order volume and market share.

Clarkson data shows that from January to October, the cumulative global new ship order volume reached 34.75 million CGT, a decrease of 28% compared to 47.96 million CGT in the same period last year. China secured 15.81 million CGT, holding a 46% market share and ranking first; South Korea secured 14.65 million CGT, with a 42% market share and ranking second. Compared to 43.7% at the end of September, China's market share increased by more than 2 percentage points, while South Korea's market share decreased by 1.6 percentage points.

Since the beginning of the year, the Chinese and South Korean shipbuilding industries have been engaged in a tug-of-war for new ship orders. In the first nine months of this year, South Korean shipbuilders exceeded China in order volume for six months, ranking first in the monthly order rankings. This was mainly due to South Korean shipbuilders receiving a significantly larger number of large LNG carrier orders than China.

Statistics show that South Korea won the monthly order "championship" in February, March, May, June, July, and September; China won the monthly order "championship" in January, April, September, and October.

Until the end of September, China's shipbuilding industry narrowly beat South Korea by only 50,000 CGT and 0.1 percentage points. However, with China's significantly larger order volume in October, the gap between the two has widened to 4 percentage points.

In terms of order backlog, Chinese shipbuilders still lead South Korea. As of the end of October, the global backlog of new ship orders was 104.7 million CGT, an increase of 860,000 CGT compared to the end of September. Among them, China accounted for 44.89 million CGT, with a market share of 43%, up 1 percentage point from the end of September; South Korea accounted for 36.75 million CGT, with a market share of 35%, up 2 percentage points from the end of September.

Meanwhile, new ship prices have fallen for the first time in 22 months since December 2020. At the end of October, the Clarkson Newbuilding Price Index was 161.96 points, a slight decrease from 162.27 points the previous month, ending nearly two years of continuous growth since December 2020. However, it was still 9.68 points higher than at the end of October last year.

In terms of ship types, the price of a 174,000 cubic meter LNG carrier rose from US$244 million at the end of September to US$248 million, an increase of US$4 million; VLCC remained at US$120 million; and the price of ultra-large container ships rose from US$214 million to US$215 million, an increase of US$1 million.

South Korean industry insiders said that while the global new ship order volume remains high this year, it is showing a downward trend compared to 2021, which was considered a "super boom" period. In October, although South Korean shipbuilders ceded the global order championship they had just regained in September to China, they continued to receive orders, particularly for high value-added vessels such as LNG carriers. Specifically, from January to October, China received orders for 570 vessels, while South Korea only received 261, less than half of China's. However, in terms of CGT, South Korea is only 4 percentage points behind China. This confirms that South Korea is continuously receiving orders for high value-added vessels. This is because, with orders for the next four years already nearly saturated, South Korean shipbuilders are changing their business strategy, focusing more on order quality than quantity.

In addition, a source from a South Korean shipbuilder said: "As of now, the three major South Korean shipbuilders have received more than 100 LNG carrier orders this year, reaching a record high. Dock resources are already fully booked until 2026, and the workload is very saturated. Receiving a large number of high value-added new ship orders, such as LNG carriers, has laid the foundation for improving the performance of South Korean shipbuilders. However, on the other hand, it has also caused order overflow, giving Chinese shipbuilders opportunities to secure LNG carrier orders."