The global shipbuilding industry is indeed facing a significant slowdown in new orders, with the January-May 2025 period seeing volumes fall to nearly half the level of the same period last year. This represents the lowest order volume for this timeframe since 2021, prompting concerns that the recent positive momentum in the industry could decelerate sooner than anticipated.
Reducing Reliance
Despite a recent dry spell in new shipbuilding orders, South Korean shipyards are anticipating a renewed period of growth, largely fueled by a global surge in Liquefied Natural Gas (LNG) projects. The shift towards energy security, intensified by Russia’s invasion of Ukraine, has significantly elevated the importance of LNG as a global energy source.
As global electricity demand continues to rise, many nations are actively working to reduce their reliance on traditional fossil fuels, leading to a substantial increase in LNG consumption. Industry experts believe this global trend creates a highly favorable environment for South Korean shipbuilders. South Korean yards are widely recognized for their technological advancement and expertise in constructing complex, high-value vessels like LNG carriers, providing them with a significant competitive edge over their Chinese rivals, whose strengths typically lie in mass production of less specialized ships. South Korea maintains an impressive market share in LNG carrier construction, with approximately 90% of the 750 operational LNG carriers globally being “Made in Korea.”
A prime example of South Korea’s dominance in this niche market is the 2020–2023 Qatar LNG project. This ambitious initiative, led by Qatar (the world’s top LNG exporter), aimed to significantly boost its annual LNG production capacity from 77 million tons in 2020 to over 126 million tons by 2027. During this period, South Korea’s three major shipbuilders – HD Hyundai Heavy Industries, Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering), and Samsung Heavy Industries – secured an overwhelming 98 out of the 128 LNG carriers ordered by Qatar, effectively dominating these high-value contract awards.
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Source: The Chosun Daily
