41 ships! A great start to the year! Chinese shipbuilders win the first order of the Year of the Dragon

  At the start of the new year 2024, China and South Korea engaged in another intense competition in the global shipbuilding market. Continuing the significant lead from last year, Chinese shipbuilders once again secured over half of the global new ship orders in January, taking the top spot with a considerable 15 percentage point advantage.

According to data released by Clarksons on February 13, global new ship orders in January totaled 96 vessels and 2.57 million corrected gross tons (CGT), representing a 2% month-on-month increase and a 26% year-on-year decrease in CGT. China secured 41 vessels and 1.36 million CGT, holding the top spot with a 53% market share; South Korea secured 32 vessels and 970,000 CGT, holding second place with a 38% market share.

As of the end of January, the global backlog of new ship orders stood at 125.6 million CGT, down 1.18 million CGT month-on-month. China's backlog reached 62.17 million CGT, holding first place with a 50% market share; South Korea's backlog was 38.69 million CGT, with a 31% market share.

It is worth mentioning that new ship prices continued their upward trend in January. At the end of January, the Clarksons Newbuilding Price Index stood at 181.27 points, up 18.6 points year-on-year, representing an 11% increase. By ship type, LNG carriers of 174,000 cubic meters or more were priced at US$265 million; Very Large Crude Carriers (VLCCs) at US$128 million; and Ultra Large Container Vessels at US$237 million.

In 2021, 2022, and 2023, China had consecutively surpassed South Korea for three years, winning the title of global champion in new ship orders. In 2021 and 2022, China's market share was close to 50%, ranking first, while South Korea's market share was 38%, ranking second. In 2023, China's order volume accounted for 58.9% of the global market, while South Korea's market share dropped sharply to 24.1%.

However, South Korean industry insiders stated that although they lost to China again in new ship orders in 2023, the quality of South Korean shipbuilders' order backlogs is continuously improving. Last year, the total global order volume for large LNG carriers reached 5.54 million CGT, with South Korea securing 4.41 million CGT, representing a market share of nearly 80%. Simultaneously, South Korean shipbuilders also secured orders for methanol dual-fuel container ships, liquefied carbon dioxide (LCO2) carriers, Very Large Ammonia Carriers (VLACs), and ammonia-powered LPG carriers, continuously expanding their order base for high value-added ship types.

Since entering 2024, South Korean shipbuilders have continued their selective order strategy, focusing on securing more profitable high-end and environmentally friendly ship types. To date, HD Hyundai Heavy Industries has secured 38 ship and offshore orders this year, with a total contract value of US$4.65 billion (approximately RMB 33.43 billion), representing approximately 34.4% of its annual order target of US$13.5 billion. This includes 2 large LNG carriers, 15 VLGC/VLACs, 15 product tankers, 1 Very Large Ethane Carrier (VLEC), 2 crude oil tankers, 2 LCO2 carriers, and 1 offshore platform topside module. Samsung Heavy Industries has secured 17 ship and offshore orders this year, with a total contract value of US$3.7 billion (approximately RMB 26.63 billion), nearly half of its total orders of US$8.3 billion last year, including 15 174,000 cubic meter LNG carriers and 2 VLACs. Hanwha Ocean has also secured 2 VLAC orders with a total contract value of US$249 million (approximately RMB 1.792 billion).

South Korean industry insiders stated that due to the improved order market in the previous two years and the continued strength of the new shipbuilding market in 2023, both South Korean and Chinese high-quality shipyards have relatively sufficient order backlogs. In particular, South Korea, due to its sufficient order backlog and tight shipyard schedules, finds it difficult to further expand its order volume, making the trend of selective order taking very obvious.

According to Clarksons' forecast, global new ship orders in 2024 will reach 43.1 million CGT, similar to the 2023 forecast of 43.4 million CGT, driven by positive momentum in tankers, bulk carriers, LNG carriers, and container ships. In particular, with the continuation of a selective order strategy focusing on high value-added vessels, South Korea's new ship order volume in 2024 is expected to reach 9.1 million CGT, a decrease of 10.4% compared to the 2023 annual forecast.