South Korean Media: China Surpasses South Korea in LNG Carrier Orders, 34 to 32!
On September 4, South Korea's daily newspaper JoongAng Ilbo published an article stating that this year, Chinese shipyards have for the first time surpassed their South Korean counterparts in orders for liquefied natural gas (LNG) carriers. This achievement is attributed to Chinese shipyards expanding production capacity and leveraging cost advantages to secure more orders. Meanwhile, South Korean shipbuilders, having secured orders for several years, now have nearly fully occupied dry docks. South Korean analysts warn that if China rapidly accumulates experience in building LNG carriers, medium- to long-term competition could become even fiercer.
A recent report from shipping brokerage Banchero Costa shows that by early July, Chinese shipyards had secured 34 LNG carrier orders—surpassing South Korea’s 32. The gap between the two nations in LNG carrier orders continues to narrow. Although South Korea led China significantly in 2022 with 113 orders compared to China’s 43, the gap narrowed to 55 vs. 27 in 2023, and further reduced to 56 vs. 46 in 2024. Last year, South Korea received 39 orders, while China received only 12.
The customer base is shifting from predominantly Chinese shipping companies to include firms from the Middle East, Europe, and Southeast Asia, such as those from the UAE, Singapore, Greece, and Malaysia. These orders are mainly won by subsidiaries of China State Shipbuilding Corporation, including Jiangnan Shipyard and Hudong-Zhonghua Shipbuilding.
The primary reason behind China’s growing order volume lies in South Korea’s limited available production capacity. Due to constraints on land area, combined with a surge in orders for other vessel types such as crude oil tankers, container ships, and car carriers, South Korean shipyards lack the ability to expand further. Currently, South Korea’s order backlog is sufficient to meet demand for 2 to 3 years. In 2024, around 80 LNG carriers are planned for delivery; 80 in 2027, and at least 60 in 2028.
Increasing domestic demand for natural gas and rising orders from Chinese shipping companies have also driven the growth in orders. Banchero Costa estimates that at least one-quarter of the LNG carriers contracted by Chinese yards this year come from domestic shipping firms. Chinese shipping companies account for about 9% of global LNG carrier orders, compared to just 3% for South Korea. Additionally, evaluations suggest that relatively lower prices offered by Chinese shipyards—driven by expanded dock capacity—are influencing foreign shipping companies’ choices.
Lee Eun-chang, a researcher on shipbuilding at the Korea Institute for Industry, Economy and Trade, said: “The expansion of China’s shipbuilding scale may lead to accumulation of technology and production experience. Since LNG carriers are a core vessel type for South Korea, it would be best to maintain domestic shipbuilding capacity rather than relying on overseas outsourcing.”
Original article: toutiao.com/article/1875385615329292/
Disclaimer: The views expressed in this article are those of the author(s) alone.