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The Korean shipbuilding industry’s order share plunged amid a strong showing by rival China in April.

According to Clarkson Research, a U.K.-based shipbuilding and shipping market analyst, Korea’s ship order intake in April ranked second globally with 670,000 CGT (13 ships). The figure represented only 14 percent of the global ship orders (4.71 million CGT) and was a significant drop from the country’s share of shipbuilding orders (38 percent) in March. China, on the other hand, took the top spot with 3.58 million CGT (91 ships) in April, representing a 76 percent share. This was a significant increase from the previous month’s share (43 percent) and marked the second consecutive month that China held the top spot.

The widening gap between Korea and China in shipbuilding order shares is attributable to their different order-taking strategies. Korea’s shipbuilding industry is pursuing a selective ordering strategy, focusing on eco-friendly, high-value-added vessels such as liquefied natural gas (LNG) carriers and very large ammonia carriers (VLACs). However, the Chinese shipbuilding industry is targeting not only large ships but also medium-sized ships based on its larger production capacity and price competitiveness than Korea’s. This fact led to the widening gap, industry insiders say.

However, questions are being raised as to whether or not Korean shipbuilders’ selective ordering strategy will work in the future. LNG carriers accounted for 55.4 percent of South Korea’s total shipbuilding order intake in the first quarter, while liquefied petroleum gas (LPG) carriers and VLACs accounted for 21.8 percent. However, their strong performances in taking orders for LNG carriers was largely due to the second batch of the orders for the Qatar Project, which began in July 2023 and placed shipbuilding orders with Korean shipbuilders earlier this year. Some experts say that Korean shipbuilders will hardly show such strong performances in taking new orders in the new shipbuilding market in the future.

“In terms of new LNG carrier orders, it is difficult to expect much volume other than that related to some development projects after the Qatar order type,” said the Export-Import Bank of Korea’s Overseas Economic Research Institute in its latest report on the shipping and shipbuilding industry’s first quarter trends.
Source: Business Korea