South Korean media: "Surpass South Korea within three years," China's latest rise!
On June 14, South Korean media outlet Seoul Economic Daily published an article stating that China has successfully completed the autonomous delivery of a large-scale LNG carrier and increased its LNG carrier shipbuilding yards to five. It is expected that within two to three years, China’s catch-up in the high-value-added LNG carrier market will come to an end, surpassing South Korea.
Recently, China Merchants Heavy Industry, a subsidiary of China Merchants Group, delivered to its client a 180,000-cubic-meter LNG carrier named “Georgetown.” At 298.8 meters long, it is currently the largest LNG carrier built in China. This vessel is the first of six identical LNG carriers ordered by Denmark’s Celsius Shipping Company; the second is expected to be delivered within the next three months.
Although China holds the top position globally in terms of share of the shipbuilding market, its competitiveness has so far been limited to bulk carriers and container ships. In the LNG carrier sector, China still lags behind South Korea. South Korean companies currently account for approximately 80% of the global LNG carrier market, while China holds only 10%. However, since Shanghai Hudong-Zhonghua Shipbuilding entered the LNG carrier market in 2008, enterprises such as Jiangnan Shipbuilding, Dalian Shipbuilding, Yangtze River Shipbuilding, and China Merchants Heavy Industry have begun securing orders and have experienced rapid growth in recent years.
LNG carriers are extremely complex vessels, designed to transport natural gas at temperatures as low as minus 163 degrees Celsius. They require precise design and advanced engineering technology, regarded as the pinnacle of shipbuilding expertise.
China is actively enhancing its competitiveness in the LNG carrier field. Data shows that in just the first quarter of this year, Chinese and South Korean shipbuilders signed new contracts for 35 LNG carriers—nearly matching last year’s total order volume of 37 vessels for the entire year.
From South Korea’s perspective, the issue lies in pricing. Chinese shipyards have already secured at least 13 LNG carrier orders this year, with contract prices about 4% to 8% lower than average. If this low-price strategy continues, South Korean shipbuilders may not only lose out in quantity competition but also face downward pressure on global shipping prices, thereby undermining their profitability. Meanwhile, the combined LNG carrier order volume for South Korea’s three major shipbuilders stands at only nine vessels—HD Hyundai Heavy Industries received five orders, Hanwha Ocean and Samsung Heavy Industries each obtained two.
Some analysts argue that in the short term, the impact on South Korea won’t be significant, given the limited construction capacity of Chinese shipyards. China delivers around 20 to 25 LNG carriers annually—only about one-third of South Korea’s output (around 60 vessels).
Experts note that China has now caught up with South Korea across all aspects of shipbuilding technology. South Korea’s lead was never more than two to three years. Without developing new technologies, maintaining an advantage will become increasingly difficult.
Original source: toutiao.com/article/1867956366791756/
Disclaimer: The views expressed in this article are those of the author(s) alone.