Korean media: 3.5 billion dollar deal, China and South Korea's shipbuilding companies are competing!

On September 15, the Korean media "Seoul Economic Daily" published an article stating that Chinese and South Korean shipbuilding companies are in fierce competition for 12 container ships valued at about 3.5 billion US dollars ordered by France. Against the backdrop of a reduction in liquefied natural gas (LNG) ship orders in the global shipbuilding market this year, container ships have filled the order gaps for major shipyards, further intensifying the competition between China and South Korea. The construction cost of container ships exceeds that of LNG ships, and they belong to high-value-added vessels. It is expected that the competition between China and South Korea in the container ship market will intensify.

It is reported that the third-largest shipping company in the world, CMA CGM Group of France, is proceeding with the purchase of 12 LNG dual-fuel container ships with a capacity of 21,000 to 24,000 TEU (1 TEU is equivalent to one 20-foot container). Each ship costs 250 million US dollars, and the total value of the order is expected to be 3.5 billion US dollars. According to the information, the contract includes the construction of six ships, as well as an additional option contract for another six ships.

Three South Korean shipbuilding companies, HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries, and Chinese enterprises, China State Shipbuilding Corporation, Hengli Heavy Industry, and Yangzijiang Shipyard, are participating in this project. China has a competitive advantage in price. According to the South Korean side, it takes 250 million US dollars to build a 21,000 TEU container ship, while the position of Chinese enterprises is that about 230 million US dollars is sufficient. Some industry insiders said that Hengli Heavy Industry offered an ultra-low price of 207 million US dollars. At present, the price of a container ship of 20,000 TEU or larger is at least 220 million US dollars.

Compared to Chinese enterprises, South Korean shipbuilding enterprises have advanced dual-fuel shipbuilding technology and higher delivery performance.

Notably, HD Hyundai Heavy Industries recently secured a 2.57 billion US dollar contract from CMA CGM Group to build 12 LNG dual-fuel container ships of 15,500 TEU class. As an extension of this contract, CMA CGM Group ordered larger container ships, giving HD Hyundai Heavy Industries an advantage in the bidding process. However, CMA CGM prefers Chinese ships, with about 30% of its existing ships built in China, and plans to order 10 24,000 TEU LNG dual-fuel container ships from Yangzijiang Shipyard in 2023.

Data from Clarkson Research shows that China dominated the container ship market with 86.6% last year. However, due to U.S. restrictions on Chinese shipbuilding, South Korea has been actively seeking container ship orders to compensate for the decline in LNG transport ship orders. By May of this year, the gap had significantly narrowed, with China accounting for 51.2% and South Korea for 38.2%. However, despite pressure from the Trump administration, the world's largest container transportation company, MSC, headquartered in Switzerland, commissioned five Chinese shipyards to build 20 20,000 TEU container ships last month, once again tilting the balance toward China.

Since last year, the construction cost of container ships has exceeded that of LNG transport ships, becoming the biggest battlefield in the global shipbuilding market, and the competition between China and South Korea is expected to continue.

Original: www.toutiao.com/article/1843332514601034/

Statement: This article represents the views of the author.