The Chosun Daily states that South Korea’s share of the global shipbuilding market is projected to fall below 20% in 2024, marking its lowest level since 2016, according to data from Clarksons Research. This decline underscores a significant shift in the competitive landscape as China continues to dominate the industry.
Key Developments
- Declining Market Share:
- South Korea’s market share, which was 44% in 2018, has steadily declined to an estimated 18% in 2024. This marks the lowest point since 15.5% in 2016, a year when the industry faced a major downturn.
- South Korean shipbuilders have so far secured 1,092,000 compensated gross tons (CGT) from 248 vessels, compared to 4,177,000 CGT (1,518 vessels) by China, which now commands 69% of global orders.
- China’s Growing Dominance:
- China’s aggressive low-cost strategies and domestic demand have enabled it to dominate the containership and bulk carrier markets and now make inroads into the LNG carrier segment, historically dominated by South Korea.
- Chinese shipbuilders now account for over 40% of LNG carrier orders, challenging South Korea’s leadership in this high-value sector.
- Production Constraints in South Korea:
- The Big 3 South Korean shipbuilders—HD Korea Shipbuilding & Offshore Engineering (HD KSOE), Hanwha Ocean, and Samsung Heavy Industries (SHI)—hold a three-year backlog of orders, operating their shipyards at full capacity.
- While this robust order book sustains operations, it limits their ability to compete for new orders, giving Chinese competitors an edge.
- Opportunities and Challenges:
- Eco-Friendly Technologies: South Korea could leverage dual-fueled engines and other green innovations to maintain a competitive advantage in an increasingly eco-conscious global market.
- Geopolitical Shifts: Efforts by the United States and Canada to diversify away from reliance on Chinese shipyards may create opportunities for South Korean shipbuilders.
- Strategic Partnerships: Strengthening ties with allied nations is suggested as a way to counterbalance China’s expanding influence.
Outlook for South Korean Shipbuilders
Although South Korea remains a leader in high-value shipbuilding segments like LNG carriers, its shrinking overall market share raises concerns about long-term sustainability. To retain a competitive edge, the industry must adapt by focusing on innovation, expanding partnerships, and leveraging geopolitical trends to tap into emerging demand for alternatives to Chinese shipyards.
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Source: THE CHOSUN DAILY
