The world’s shipbuilding companies are concentrated in three East Asian countries – China, South Korea, and Japan – that when combined control 90% of global market share.

But finally, after seven years, South Korean shipyards have recaptured the lead in annual shipbuilding orders secured, according to newly released data from Clarkson Research institute. South Korea lost its No. 1 rank to China in 2012, and remained in second place up to 2017.

The data reveals that South Korean shipyards received new orders in 2018 for a combined 12.63 million compensated gross tons (CGTs), which accounts for nearly 45% of the 28.6 million CGTs for all orders placed globally.

China, at second place, received orders for 9.15 million CGTs, while Japan, at third place, received orders for 3.6 million CGTs.

In December 2018 alone, South Korean shipbuilders garnered orders totaling 1.5 million CGTs, followed by China shipbuilders with 340,000 CGTs.

Increased orders for LNG Carriers played a major role in helping South Korean shipbuilders leapfrog over China and retake the top rank in the global shipbuilding hierarchy.

South Korea’s Samsung Heavy Industries (SHI) announced on December 31 that it had received an LNG Carrier order worth about $190 million, plus 4 LNG Carrier orders in December for a total of 6 LNG Carriers.

The South Korean shipyard’s orders for 2018 reached 49 vessels – comprising 18 LNG Carriers, 13 container ships, 15 tankers and 3 special purpose ships. The South Korean shipbuilder aims to secure $8.2 billion worth of orders in 2019.

South Korean shipyards received over 80% of LNG Carrier orders in 2018. Yonhap News Agency reports that South Korea’s top 3 biggest shipbuilders: Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI), and Daewoo Shipbuilding & Marine Engineering (DSME) met their order targets for 2018 as a result of these LNG Carrier orders. HHI received orders valued at $13.3 billion, SHI at $5.7 billion, and DSME at $6.81 billion.

The Clarkson Research data shows that by end-December 2018, a total of 1.87 million CGTs of new orders were placed globally.

According to Clarkson Research, LNG Carrier orders globally are likely to total 69 in 2019, up from 65 in 2018, and 17 in 2017. Ironically, it is mainly China’s growing use of LNG, together with the adoption of LNG globally as a more environmentally friendly fuel that is driving the demand. An annual average total of 63 LNG Carriers are likely to be ordered between 2020 and 2027.

Backlog Orders. The Clarkson Research’s latest data shows that China holds the largest backlog order of 29.14 million CGTs, followed by South Korea with 20.9 million CGTs, and Japan with 13.91 million CGTs.

References:

• “S. Korea reclaimed top spot in shipbuilding orders in 2018.“ 9-January-2019. Arirang.co.kr
• Jung Hwan Won. “S. Korea regains first spot in shipbuilding orders.” 9-January-2019. Themeditelegraph.com
• Marex. “Orders: South Korea Reclaims Top Spot from China.” 8-January-2019. Maritime Executive.