- China’s share of global shipbuilding orders dropped significantly in the first half of 2025, narrowing the gap with South Korea.
- Geopolitical factors and shifting buyer preferences have prompted shipowners to consider Korean and Japanese shipyards.
- US port fees and equipment tariffs, along with reduced global demand, have impacted China’s dominance in both ship construction and repair services.
China’s long-held lead in the global shipbuilding sector saw a marked decline in the first half of 2025. Citing industry data from Clarksons Research, the South China Morning Post reported that new ship orders for Chinese shipyards fell sharply—dropping by 68% year-on-year to 26.3 million deadweight tonnes (dwt). This is one of the steepest declines seen in recent years, according to Business Standard.
In comparison, South Korea—traditionally the second-largest shipbuilding nation—experienced a much smaller drop of just 7% in the same period, with 14.2 million dwt in new orders.
A Shifting Balance in Global Shipbuilding
While China continues to lead in terms of order volume, its global share fell from 75% in the first half of 2024 to 56% in 2025. Meanwhile, South Korea’s share rose from 14% to 30%, indicating a significant shift in market dynamics.
Industry experts suggest that growing geopolitical tensions have led shipowners to diversify their investments away from China. Korean and Japanese shipyards, long known for quality builds, have seen a rise in demand. South Korea’s leading companies, such as Hyundai Heavy Industries (HHI) and Hanwha Ocean, have strengthened their positions by expanding into the US market. Notably, HHI signed a partnership with Huntington Ingalls Industries, the largest US military shipbuilder, to share technology and pursue joint projects.
Impact of New Regulatory Measures
A contributing factor in this shift has been recent policy actions by the US, including the introduction of port entry fees for ships built or operated by Chinese firms and tariffs on Chinese-made shipbuilding equipment like ship-to-shore cranes. These measures, while met with industry pushback, appear to be influencing shipowner decisions.
The effects are also being seen beyond newbuild contracts. China’s share of repair and maintenance work for very large crude carriers (VLCCs) has fallen from an average of 70% (2021–2024) to around 50% in early 2025.
Demand Dynamics and Second-Hand Value Considerations
Market analysts note that the global shipbuilding sector has entered a downcycle in 2025, with overall demand slowing. During previous boom years, Chinese yards absorbed excess demand when Korean and Japanese capacities were full. Now, with fewer orders to go around, that overflow is no longer reaching Chinese shipbuilders.
Additionally, vessels built in Korea and Japan are known to command higher resale values in the second-hand market—another factor steering owners toward these countries.
Looking Ahead
Despite current pressures, Chinese shipyards still account for 23% of the world’s active fleet. While major players are expected to remain strong, smaller private yards may face greater challenges. As South Korea deepens its shipbuilding collaboration with US firms and global demand continues to evolve, the international shipbuilding landscape may see continued realignment in the years to come.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: Business Standard
