In this week’s “Shipping Number of the Week,” BIMCO’s Shipping Analysis Manager Filipe Gouveia delves into the evolving landscape of Chinese shipyards’ market share in global newbuilding orders.
Decline in China’s Newbuilding Contracting Share
According to Filipe Gouveia, China’s share of newbuilding contracting has declined significantly to 52% from 72% in the previous six months. This notable decrease is primarily attributed to growing concerns over USTR port fees on Chinese ships in US ports, which are set to take effect in October 2025 and will impact both Chinese-owned/operated vessels and ships built in China. This trend has been further exacerbated by a general drop in global ship contracting and a shift in the types of ships being ordered.
Global Newbuilding Contracting Downturn
Overall, global newbuilding contracting, measured in Compensated Gross Tonnage (CGT), saw a sharp 54% year-on-year (y/y) drop during the first half of 2025. The slowdown was particularly pronounced for bulkers, tankers, and gas carriers, sectors affected by weaker freight rates. In contrast, container and cruise ships were the only large sectors where contracting expanded, driven by factors like decarbonization targets and a scarcity of modern secondhand tonnage.
China’s Shifting Dominance
Despite the recent decline in market share, China maintains a leading position in the global shipbuilding industry, with the cruise ship sector being its only notable absence. In 2024, China was second to South Korea in gas carrier shipbuilding. However, so far in 2025, South Korea has also surpassed China in crude tanker shipbuilding.
The global shipbuilding industry is currently facing significant capacity constraints, which have led to a large orderbook with extended lead times. This is particularly true for larger vessels, as well as for container ships, gas carriers, and cruise ships. Of the contracts secured in 2025, an estimated 31% are expected to be delivered in 2027, 38% in 2028, and 23% in 2029 or later.
Challenges for South Korea and Japan
South Korea and Japan, the second and third largest shipbuilding nations, respectively, are grappling with challenges in expanding their production capacity. Both countries are experiencing labor shortages due to declining populations.
This demographic issue has resulted in higher labor costs, which in turn affect their competitiveness in the global market. While both nations are making efforts to mitigate these challenges, including the use of migrant labor and strategic government initiatives, the demographic headwinds remain a significant factor impacting their ability to scale up production and compete effectively with lower-cost shipbuilding centers.
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Source: Safety4sea
