- New LNG carrier orders have declined by nearly 90% in early 2025 compared to the same period last year.
- Shipyards face reduced utilization and possible production slowdowns through 2027.
- Prolonged market softness may lead to supply constraints in future LNG transportation capacity.
The global shipbuilding industry is experiencing a significant contraction in demand for liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers. In the first five months of 2025, orders for LNG carriers have fallen by approximately 90%, while LPG carrier orders have decreased by over 75% year-on-year, reports the Chosun Daily.
This pronounced decline signals a slowdown in market momentum and poses considerable challenges for shipbuilders that had previously scaled up capacity to meet booming gas carrier demand.
Production shortfalls and underutilization at major shipyards
If the current trend continues, production shortfalls and underutilization at major shipyards may persist well into 2027. Yards that invested heavily in LNG-focused infrastructure could face reduced output, potential workforce adjustments, or temporary project suspensions. The downturn also raises the likelihood of sector consolidation, with financially weaker yards potentially exiting the market or becoming acquisition targets.
This weakening in newbuilding activity may have broader implications for the global maritime and energy sectors. Although the current slowdown could ease short-term concerns of vessel oversupply, it may also constrain future fleet availability when LNG demand rebounds. A sustained lull in new orders may result in capacity shortages, longer lead times, and upward pressure on newbuilding prices and charter rates in the medium to long term.
While the decline may reflect temporary factors such as project deferrals, high interest rates, or uncertainty in energy policy, it underscores the cyclical nature of the shipbuilding industry. Going forward, recovery in this segment will depend on renewed investment in LNG infrastructure, global energy demand trends, and regulatory clarity on decarbonization pathways. Until then, shipbuilders must navigate a more cautious and competitive environment amid evolving market dynamics.
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Source: The Chosun Daily
