Korea's Joseon Regains World No.1 in Ship Orders... New Ship Prices Highest in 12 Years

South Korea Secures 52% of Global Ship Orders in October
October Cumulative Orders Reach Highest in 13 Years
New Ship Prices Highest in 12 Years Since 2009

[Asia Economy Reporter Hwang Yoon-joo] The Korean shipbuilding industry reclaimed its position as the global leader in ship orders from China last September. As ship orders surged, the newbuilding price index, which serves as the benchmark when negotiating new ship prices, rose to its highest level in 12 years since June 2009, a boom period for the shipbuilding industry.

According to data from Clarkson Research, a ship and shipping market analysis firm, Korea secured 1.12 million CGT (Compensated Gross Tonnage) or 52% of the global ship orders totaling 2.13 million CGT last month. Chinese shipyards received orders for 810,000 CGT, accounting for 38%.

Korea and China have been alternating in the top spot for monthly order volumes, competing closely. From January to October this year, China led with cumulative orders of 19.93 million CGT (756 vessels, 49%), followed by Korea with 15.79 million CGT (373 vessels, 39%). Japan secured 3.71 million CGT (174 vessels, 9%).

The cumulative ship orders through October this year reached 40.99 million CGT, a 162% increase compared to 15.63 million CGT during the same period last year. This is the highest level since 2013 (46.98 million CGT). By ship type, large container ship orders dominated the cumulative orders up to last month. This is attributed to the surge in demand for container ships due to the increase in global cargo volume. Orders for large container ships of 12,000 TEU (1 TEU equals one 20ft container) class rose nearly tenfold from 1.23 million CGT (16 vessels) last year to 11.09 million CGT (186 vessels) this year.

Large liquefied natural gas (LNG) carriers increased about twofold from 2.39 million CGT (28 vessels) to 4.76 million CGT (55 vessels) this year. Except for some oil tankers, orders increased evenly across all ship types.

As shipyards accumulate work to build ships, ship prices are also rising. The global order backlog increased to 89.03 million CGT, with Korea securing 28.82 million CGT. Korea’s shipyard order backlog is at its highest level in five years since March 2016 (29.38 million CGT).

By country, China holds 36.33 million CGT, accounting for 41% of the global order backlog, followed by Korea with 28.82 million CGT (32%) and Japan with 9.44 million CGT (11%). Korea saw the largest increase in backlog among Korea, China, and Japan, with a 360,000 CGT rise last month alone.

The newbuilding price index, which serves as the benchmark when shipyards, shipping companies, and shipowners negotiate new ship prices, stood at 152.28 points, up 3 points from the previous month and about 20% higher than at the beginning of this year (127.11). The newbuilding price index surpassing 150 points is the first time in 12 years since June 2009.