Chinese Shipbuilders Benefiting from Fully Booked Korean Shipyards
Reuters reported on Dec. 12 that Chinese shipbuilders are benefiting from fully-booked Korean shipyards. Citing shipbuilding data from Clarksons Research, Reuters reported that Chinese shipbuilders won orders for 45 LNG carriers worth US$9.8 billion this year, a five-fold increase from 2021. The number of orders received has tripled compared to last year, with three Chinese shipbuilders taking 30 percent of the 163 new orders in 2022.
As of the end of November, Chinese shipbuilders’ backlog of LNG carrier orders in 2022 stood at 66 vessels, accounting for 21 percent of global orders worth about US$60 billion. Only 9 percent of the currently operating LNG carriers were built by Chinese shipbuilders. Shanghai-based Hudong Zhonghua Shipbuilding is the only one among the three large Chinese shipbuilders that has experience in building large-scale LNG carriers.
Reuters explained that this was because related companies began to secure ships as demand for LNG increased as the world suffered an energy crisis following Russia’s invasion of Ukraine. In particular, global shipowners prefer Korean shipbuilders because they are efficient in design and construction and have a domestic supply chain despite relatively high labor costs. But they turned their eyes to China as Korean shipbuilders were fully booked and could not take any more LNG ship orders.
Article by: Jung Min-hee (Korea Business)