Last month, the Korean shipbuilding industry’s share of ship orders fell sharply amid the rapid progress of its rival China.
According to Clarkson Research, a British shipbuilding and shipping market analysis firm, Korea ranked second in the world with 670,000 CGT (13 ships) last month. It accounts for only 14% of the world’s ship orders (4.71 million CGT) and has fallen significantly from Korea’s ship order share (38%) in March, of the previous year. On the other hand, China won 3.58 million CGT (91 vessels) last month, ranking first with a 76 percent share. It has risen significantly from its market share (43%) of the previous month and has maintained its No. 1 position in the world for two consecutive months.
The reason for the wide gap in order share between Korea and China is that the two companies have different strategies. Under the selective order strategy, the Korean shipbuilding industry is winning construction contracts focusing on eco-friendly and high-value-added ships such as liquefied natural gas (LNG) carriers and super-large ammonia carriers (VLACs). However, the industry interprets that the Chinese shipbuilding industry is targeting not only large ships but also mid-sized markets based on its greater production capacity and price competitiveness than Korea, which inevitably leads to a difference in order volume.
However, questions are being raised about whether domestic shipbuilders’ selective order strategies will work in the future.
LNG carriers accounted for 55.4% of Korea’s total ship orders in the first quarter, while liquefied petroleum gas (LPG) carriers and VLACs accounted for 21.8%. However, the strong performance of LNG carriers was largely due to Qatar’s second project, which began in July last year and came to fruition at the beginning of this year, and some predict that it will be difficult to show such a strong performance in the new order market in the future. The Export-Import Bank of Korea’s Overseas Economic Research Institute said in its recently published “First Quarter Trends in Shipping and Shipbuilding” that “it is difficult to expect more quantity than some development project-related quantity after the type of order placed in Qatar.”
