South Korean Shipbuilders Surge Amid US-China Tensions
South Korean shipbuilders are poised to reclaim a significant share of the global market, driven by recent U.S. measures aimed at curbing China’s maritime influence. Despite a general decline in new shipbuilding demand, South Korea has secured a 22 percent market share in global orders this year, according to Clarkson Research. This rebound is particularly notable as China’s shipbuilding orders have plummeted by 47 percent during the same period.
Market Dynamics Shift in Favor of Korea
From January to November, South Korea’s shipbuilders secured orders totaling 10.03 million compensated gross tonnage (CGT), a key metric in the shipbuilding industry that accounts for vessel size and complexity. While this represents a 5 percent decrease from the previous year, it highlights a relative recovery for South Korean firms, especially in contrast to China, which saw its orders drop to 26.64 million CGT.
The anticipated recovery of South Korea’s share of global shipbuilding orders is significant, especially after it fell to a historic low of 17 percent last year. Industry analysts predict that the country’s market share will stabilize around 20 percent for the full year. This positive trend emerges amid a broader downturn in the global shipbuilding sector, where cumulative orders have decreased by 37 percent year-on-year, totaling 44.99 million CGT.
Experts attribute this shift to the U.S. government’s anti-China initiatives, which include increased regulatory risks for shipowners placing orders with Chinese shipyards. The U.S. has implemented measures such as a delayed port fee increase for China-built vessels entering American ports, making South Korean shipbuilders a more attractive option for global clients.
Record Orders for Leading Korean Firms
Leading South Korean shipbuilders are reporting impressive order volumes this year. HD Korea Shipbuilding & Offshore Engineering, the parent company of HD Hyundai’s shipbuilding units, has secured contracts worth $18.16 billion for 129 vessels, surpassing its annual target of $18.05 billion. This achievement marks a five-year streak of exceeding annual order goals since 2021.
Similarly, Hanwha Ocean has reported orders totaling $9.83 billion, including contracts for 20 very large crude carriers and 13 LNG carriers, exceeding last year’s total of $8.98 billion. Samsung Heavy Industries has also made significant progress, achieving 76 percent of its $9.8 billion annual target with contracts for various types of vessels, including LNG carriers and container ships.
While South Korean shipbuilders are experiencing a surge in revenues, primarily due to high-value ship orders, industry insiders caution that China remains a formidable competitor due to its price-competitive advantages. However, initiatives like the U.S. “Make American Shipbuilding Great Again” (MASGA) project, coupled with ongoing restrictions on China, are expected to enhance South Korea’s position in the global shipbuilding market.
In a recent development, President Donald Trump announced that the U.S. Navy’s new frigates will be constructed by Huntington Ingalls and Philly Shipyard, the latter of which has been acquired by Hanwha Ocean. Additionally, a memorandum of agreement was signed in October between Huntington Ingalls and HD Hyundai to collaborate on designing and building the U.S. Navy’s next-generation logistics support vessels, marking a significant partnership between the U.S. and South Korean shipbuilders.
