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South Korea Keeps Top Spot in Shipbuilding Orders for 5 Months
Talking Ship
South Korea Keeps Top Spot in Shipbuilding Orders for 5 Months
  • By Jung Min-hee
  • July 6, 2015, 05:45
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STX Offshore & Shipbuilding’s dockyards in Jinhae, South Korea.
STX Offshore & Shipbuilding’s dockyards in Jinhae, South Korea.

 

Despite the slump in orders, South Korean shipbuilders have ranked first in the world for five consecutive months.

According to the data compiled by Clarkson Research Services, a leading U.K.-based provider of data and market intelligence for the global shipbuilding and shipping industries, new shipbuilding orders around the globe in the first half of this year amounted to 13.28 million compensated gross tons (CGTs). The figure is about 49.2 percent from 26.99 million CGTs a year ago. In the past year, the global shipbuilding industry saw new orders halve.

During the cited period, South Korean shipyards clinched new orders totaling 5.92 CGTs. The figure is about the 96.1 percent level of 6.16 million CGTs tallied a year earlier. Even though the world's ship orders commissioned shrank to a half, Korea’s shipbuilding industry took in almost the same level as last year's.

However, the Chinese shipbuilding industry became the biggest victim of the industry downturn.

In the first half of the year, Chinese shipbuilders won 2.56 million CGTs, a fifth of the 11.86 million CGTs from the same period a year ago.

It was largely due to an abrupt fall in orders for bulk carriers, China’s major product. In fact, new bulk carrier orders in the global market in the first half of this year amounted to 55 units or 930,000 CGTs, which is a twelfth of 585 units or 11.62 million CGTs a year ago.

The first-half order booking volume for Japanese shipbuilders also fell by more than a half to 2.68 million CGTs from 6.04 million CGTs in the first half of 2014. Still, they managed to move up to second spot by overtaking Chinese competitors with a margin of 120,000 CGTs. It is the first time in 10 years for Japan to overtake China in half-year new orders, since Japanese and Chinese shipbuilders won 7.45 million and 4.89 million CGTs, respectively, in the first half of 2005.

Despite the slump in orders, Korean shipbuilders have secured the largest amount of new orders by month to retain the top spot in the world for five months in a row. However, some industry watchers say that it is meaningless to determine the ranking when global demand for shipbuilding has dropped by half.

According to Clarkson Research Services, the total order volume around the world in June alone amounted to 48 units, or 2.09 million CGTs. South Korean shipbuilders won the largest amount of new orders by CGT in June with 880,000 CGTs, followed by Chinese shipbuilders with 450,000 CGTs, and Japanese shipbuilders with 16,000 CGTs.

Accordingly, South Korea has maintained the leading position for five months since Feb. The nation had topped the list in terms of the number of awarded orders by month from Oct. to Dec. last year, but yielded its top position to Japan in Jan. once.

However, China still maintains its top place in terms of order backlog. As of the end of June or early July this year, new shipbuilding orders in the global market decreased to 108.99 million CGTs, a 720,000 CGT decrease from the previous month. China retains its top position in terms of order backlog totaling 40.96 million CGTs, followed by South Korea with 32.8 million CGTs, and Japan with 19.69 million CGTs, according to the data.

South Korea saw a drop by 1.59 million CGTs from 34.39 million CGTs at the end of Dec. 2014 in terms of order backlog. However, China saw the decrease by 6.37 million CGTs to 40.96 million CGTs from 47.33 million CGTs at the end of last year.

An official from the shipbuilding industry said, “Korea could maintain the top position only because there were new shipbuilding orders for large container carriers this year, in which Korea has competitiveness in technology. However, the Korean shipbuilding industry will not be able to look ahead to a bright future if new orders drop sharply like this.”