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South Korea still dominates

LNG carrier market

SOUTH KOREA SOUTH Korea’s so-called ‘big three’ shipbuild- 130% increase in LNG carrier orders placed with
ers continue to make their mark on the global Korean firms last year compared to 2021.
The country has LNG carrier market, through the 12 months of Figures posted at the end of December indi-
secured 10.1mn tonnes last year securing a total of 10.12 million gross cate that just over 10.1 million tons of LNG car-
in fresh orders. tons in fresh orders. riers were ordered from the Korean ‘big-three’.
At the same time as relinquishing their long- This number represents a full 70% of the
held ranking as the number one nation in terms global LNG carrier orders for the year.
of total ship orders, Daewoo Shipbuilding & Speaking to local Korean media, one ship-
Marine Engineering Co. (DSME), Korea Ship- building official in the Seoul said “Korea’s three
building & Offshore Engineering Co. (KSOE), big shipbuilders hardly have room to take
and Samsung Heavy Industries Co. (SHI), as more orders as their dockyards are almost fully
compensation, now control 70% of the global booked for ships scheduled for delivery by the
LNG carrier market. end of 2026.”
The worldwide number for gross shipping The remaining 30% of orders through 2022,
tonnage ordered in 2022 totaled 41.93 million 4.4 million tons in all, went to Chinese yards.
tons. Increased tonnage for the year aside, there are
Figures in the LNG carrier sector notwith- indications that Chinese shipyards are clawing
standing, some in Seoul are concerned, however, back in the carrier market though.
that the total market share secured by tonnage Overall market share for the 12 months to
going to Korean shipyards dropped by 11% year December saw South Korean dominance plunge
on year. from 93% in 2021, to just 70% this year, with
Much of this drop though is put down to Chinese numbers increasing substantially from
increased carrier orders placed by Chinese oper- 7% to 30%.
ators with their own domestic shipbuilders as a It is a trend that may well continue past the
result of government pressure to help increase middle of the decade if Seoul is unable to add to
numbers at home. existing shipyard capacity on the Korean Penin-
Overall shipping orders won by China based sula, with yards already operating at full capacity
shipbuilders reached 20.34 million tons by and order sheets full for the next four years.
the end of the year which amounted to 49% of Another option likely to be considered is
the global total, compared to the 37% of over- a reduction in the less profitable size of con-
all orders taken by their competitors in South tainer ships which currently account for 27%
Korea. of all shipbuilding contracts at South Korean
In head-to-head competition, many shipping shipyards.
industry operators prefer Chinese shipyards in LNG carriers, seen as more profitable overall,
order to lock-in lower delivery prices on the back at present account for 65% of all vessels on order
of cheaper labour costs. across the peninsula.
In South Korea meanwhile, where labour Numbers for container ships are similar in
costs are significantly higher than across the China, but with LNG carriers making up just
Yellow Sea, shipyards employ more technologi- 22% of Chinese orders, Beijing is poised to adjust
cally superior construction techniques, and offer yard output in the coming years by cutting down
faster turnaround times from initial placement on either smaller scale container ships or bulk
of order to actual delivery according to sources. carriers in favour of the currency generating
It is this tech superiority that saw a huge LNG carriers. ™

P8 www. NEWSBASE .com Week 01 06•January•2023