As Korea, China, and Japan continue to compete in the world shipbuilding market, China took the lion’s share of large oceangoing vessel orders in 2022, reports Business Korea.
China leads, Korea follows
According to an annual report on the shipping and shipbuilding markets by ship brokerage firm Barry Rogriano Salis (BRS) Group on Nov. 19, China was building 121.3 million deadweight tons (DWT) of ships based on its order book at the end of last year.
This was up from 111 million DWT in 2021. China’s share of the global market ascended from 47.7% to 50.3% over the same period.
Korea, on the other hand, built ships of 69.8 million DWT in 2022, up from 68.3 million DWT in 2021, but its market share inched down from 29.6% to 29.0%.
Japan’s order intake shrank from 47.7 million DWT in 2021 to 36.5 million DWT last year, and its market share fell from 17.6% to 15.1%.
In terms of numbers of vessels, order backlogs were 1,794 vessels (49.53%) for China, 34 vessels (20.26%) for Korea and Japan, with 587 vessels (16.20%) for Japan at the end of 2022. China’s market share by numbers of vessels edged down from 50.01% in 2021.
Slump in U.S. commercial shipbuilding
The U.S. Congressional Research Service (CRS) cited the data and pointed out that the U.S. order backlog at the end of 2022 was only five ships, a significant difference from the three shipbuilding powerhouses.
Even based on gross tonnage, the three shipbuilding leaders had a global market share of more than 90%, while the United States only had 0.2%.
The report noted that 90% of military equipment needed for overseas wars is transported by cargo ships and expressed a concern about China’s growth in the shipbuilding industry and the United States’ lack of competitiveness.
The slump in U.S. commercial shipbuilding can have a negative impact on America’s national security, given China’s potential invasion of Taiwan and the U.S.-Russia confrontation, the report says.
The report also noted that the number of shipyards operating globally fell from 699 in 2007 to 301 in 2022, suggesting that the shipbuilding industry is suffering from excessive production. It is common for Korean and Japanese shipbuilders to suffer losses and the sale prices of their vessels rarely exceed their cost of construction.
Instead, they receive financial support as affiliates of large companies. Korean shipbuilders have repeatedly sought large relief loans from the Korean government.
The report adds that if the U.S. Congress wants to further promote America’s commercial shipbuilding sector, excessive subsidies and low profit margins around the world may raise questions about how to promote it.
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Source: Business Korea
