South Korea-China Shipbuilding Rivalry Intensifies Beyond LNG into Ammonia Carriers — Battle for World’s First and Largest Titles
South Korean and Chinese shipbuilders are currently locked in a fierce competition in the market segment of vessels that either transport ammonia as a carbon-free energy source or use it as propulsion fuel. This competition marks a significant shift in the high-value-added shipbuilding arena, expanding beyond liquefied natural gas (LNG) into the realm of ammonia.
VLAC Order Race: South Korea and China Split Nearly 50-50
In the first half of this year, South Korean and Chinese shipbuilders each secured almost half of the 20-plus VLAC construction orders. VLACs, or very large ammonia carriers, have a cargo tank capacity of 80,000 to 90,000 cubic meters and are technically demanding vessels due to ammonia’s corrosive properties and high density. Leak prevention management is crucial given ammonia’s toxicity, making the design and construction of VLACs complex and technology-intensive.
South Korea: HD Hyundai Leads with Expanding Order Backlog
Leading the charge in South Korea is HD Hyundai, particularly HD Hyundai Samho, which recently won an order for three 90,000-cubic-meter VLACs from Synergy Shipping. With an order backlog of 22 VLACs, HD Hyundai-affiliated shipbuilders are at the forefront of VLAC construction in South Korea.
China: Jiangnan Shipyard and Hengli Heavy Push with “World’s Largest” and “World’s First” Claims
In China, Jiangnan Shipyard and Hengli Heavy Industry Group are making significant strides in VLAC construction. Jiangnan Shipyard recently delivered a 93,000-cubic-meter VLAC, claiming the title of the “world’s largest” VLAC. Hengli Heavy, on the other hand, showcased its technical prowess by building a 93,000-cubic-meter VLAC on a slipway, a first in the industry.
Ammonia-Powered Vessels: Race to Capture the Green Fuel Market
Both South Korea and China are actively competing in the ammonia dual-fuel propulsion vessel segment. These vessels, which use both conventional marine fuel and ammonia for propulsion, are gaining traction as eco-friendly options due to their zero carbon dioxide emissions during combustion. HD Hyundai Heavy Industries, in particular, has made significant strides in this area, delivering the world’s first ammonia-powered vessels.
Market Impact and Outlook
The competition between South Korean and Chinese shipbuilders in the VLAC and ammonia-powered vessel market is poised to shape the future of eco-friendly shipping. As the International Energy Agency projects a significant rise in ammonia’s share of shipping fuel by 2050, the construction capability of ammonia carriers and propulsion vessels will become a crucial competitive advantage in the shipbuilding industry. While Chinese shipbuilders are narrowing the gap with claims of “world’s largest” and “world’s first,” South Korean shipbuilders still maintain an edge in VLAC order backlogs and ammonia-powered vessel deliveries, setting the stage for an exciting market landscape in the years to come.
