Declining Orders
As new orders for Korean shipbuilding companies declined significantly, Korea became market number three, far behind China. Even Japan beat Korea last month.
According to the shipbuilding industry of Korea and international shipping and shipbuilding market research company Clarksons on July 4, the number of new commercial vessel orders worldwide during the first half of 2014 was 944, equivalent to 20.48 million compensated gross tonnage (CGT). This is 17.2 percent CGT less than the same period of previous year which recorded 1,236 vessels and 24.73 million CGT.
Korean shipbuilding companies received 555 CGT new orders (164 vessels) during the first half of this year, 29.5 percent drop from 7.87 million CGT (230 vessels) of same period last year. Market share also declined to 27.1 percent from 31.8 percent.
On the contrary, China which did not perform that well early this year swept the new orders from March, and therefore recorded 9.09 million CGT (481 vessels) of new orders. Even though number of orders decreased 7.8 percent from last year’s 9.86 million CGT, market share of China increased to 44.4 percent from 39.9 percent.
In terms of total order amount, China beat Korea as well. During the first half of last year, Korea received the total US$21.7 billion of new orders, and China did US$17.3 billion. However, during the first half of this year, China received new orders worth of US$14.5 billion, whereas Korea did US$13.2 billion.
New orders to Japanese shipbuilding companies were 3.45 million CGT (177 vessels) during the first half of this year, which made market share of Japan decrease to 16.8 percent from 19.0 percent. But Japanese shipbuilders are lately trying to enhance their competitive advantages over depreciation of Japanese Yen. Especially during June, Japan became market number two (25.9 percent) right behind China (47.7 percent) which received orders of 900,000 CGT, as new orders to Japan reached 4.9 billion CGT. This made Korea the third in market with its new orders worth of 310,000 CGT. Japan beat Korea in monthly new orders record for the second time this year after April.
Total 91 new vessels, equivalent to 1.89 million CGT, were ordered worldwide last month, 28.6 percent drop from previous month. By month, new orders reached the peak of 373 vessels and 7.94 million CGT last December, and have begun to decrease ever since.
Backlogged orders which indicate workload remaining are 886 vessels (3,295 CGT) for Korea, 2,443 vessels (4,499 CGT) for China, and 939 vessels (1,842 CGT) for Japan.
An industry professional said, “The shipbuilding industry, which seemed to recover during the first half of last year, is getting into chronic recession again this year. There might be additional major restructuring of shipbuilding companies which are short of new orders.”