Over 30 ships and still lost? Chinese shipbuilders suffer rare defeat in February order battle.

2024-03-23 09:00

Affected by the Spring Festival holiday, Chinese shipbuilders fell 9 percentage points behind South Korea in new ship orders in February this year, losing the monthly championship for the first time since November last year.

According to data released by Clarksons on March 6, global new ship orders in February totaled 100 vessels and 3.41 million corrected gross tons (CGT), a year-on-year increase of 18% in CGT terms. South Korea secured 28 vessels and 1.71 million CGT, holding the top spot with a 50% market share; China secured 59 vessels and 1.41 million CGT, with a 41% market share, ranking second.

In January this year, global new ship orders totaled 96 vessels and 2.57 million corrected gross tons (CGT), a month-on-month increase of 2% and a year-on-year decrease of 26% in CGT terms. 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, with a 38% market share, ranking second.

From January to February this year, the cumulative global new ship orders totaled 232 vessels and 6.83 million corrected gross tons (CGT), an 8% year-on-year increase in CGT terms. China secured 119 vessels and 3.21 million CGT, a 29% year-on-year increase, with a 47% market share, ranking first; South Korea secured 69 vessels and 3.04 million CGT, a 27% year-on-year increase, with a 44% market share, ranking second.

As of the end of February this year, the global backlog of new ship orders reached 125.88 million CGT, a month-on-month decrease of 130,000 CGT. China's backlog reached 62.23 million CGT, maintaining its leading position with a 49% market share; South Korea's backlog was 38.61 million CGT, with a 31% market share, ranking second.

It is worth mentioning that new ship prices continued to rise in February this year. At the end of February, the Clarksons Newbuilding Price Index was 181.45 points, up 18.6 points year-on-year and 0.18 points month-on-month. By ship type, LNG carriers above 174,000 cubic meters were US$265 million, VLCCs were US$128 million, and ultra-large container ships were US$237 million, all unchanged from the previous month.

In the first two months of last year, the cumulative global new ship orders totaled 263 vessels and 6.33 million CGT. Although the number of vessels decreased by 31, the CGT increased by 500,000, indicating that the proportion of high-value-added ship types in new ship orders has further increased this year.

In 2023, in the battle for orders, China won the top spot in January, March, April, May, June, August, September, November, and December. South Korea only topped the list in February, July, and October, averaging one "turn" every four months. China has maintained a sustained suppression of South Korea.

In 2021, 2022, and 2023, China has also continuously suppressed South Korea for three consecutive years, winning the championship in global annual 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%.

Since the beginning of 2024, South Korean shipbuilders have continued to adhere to a selective order-taking strategy, focusing on high-end, environmentally friendly ship types with better profitability. To date, HD Hyundai Heavy Industries has secured 60 ship and offshore orders this year, with a total contract value of US$7.16 billion (approximately RMB 51.53 billion), approximately 53% of its annual order target of US$13.5 billion. This includes 6 large LNG carriers, 17 VLGC/VLACs, 21 product tankers, 1 VLEC, 2 medium-sized crude oil tankers, 4 LPG carriers, 4 VLCCs, 2 LCO2 carriers, 2 PCTC, and 1 topside module for an offshore platform. Samsung Heavy Industries has secured 18 new ship orders this year, including 2 VLACs, 15 174,000 cubic meter LNG carriers, and 1 shuttle tanker, with a total contract value of US$3.8 billion (approximately RMB 27.35 billion), approximately 39% of its annual order target of US$9.7 billion. Hanwha Ocean has secured 4 new ship orders this year, with a total contract value of US$510 million (approximately RMB 3.67 billion).

Too many orders! This shipbuilding giant is expanding its overseas shipyards.

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