[Heavy Industry ON]China Grabs 60% as Its Shipbuilding Chase Intensifies...The Secret Weapon of K-Shipbuilding Is

China Sharply Increases LNG Carrier Orders in January
South Korea to Widen Technological Gap with Focus on High Value-Added Vessels

Last month, Chinese shipbuilders significantly increased their orders for liquefied natural gas (LNG) carriers by leveraging price competitiveness.

The South Korean shipbuilding industry believes that there is still a technological gap with China and plans to continue its order-taking strategy this year by focusing on high value-added vessels.

A red sun is rising over a liquefied natural gas (LNG) carrier under construction at the yard dock of Hanwha Ocean's Okpo shipyard in Geoje, South Gyeongsang. Recently, the United States has been eyeing South Korea as a strategic partner to rebuild its aging domestic shipbuilding industry. Under the Trump administration's strongly promoted shipbuilding revitalization policy, the United States is expected to place orders for up to 448 vessels, including merchant ships, liquefied natural gas (LNG) carriers, and naval warships, by 2037. Kang Jinhyung, Reporter

According to Clarkson Research and industry sources on the 16th, China won orders for 13 out of 22 LNG carriers (59.1%) placed in overseas markets in January. South Korea secured orders for the remaining 9 vessels.

Although China surpassed South Korea in total order volume, this is somewhat different from the usual pattern in which South Korean shipbuilders, backed by superior technology, have led the global LNG carrier market. Of the 37 LNG carriers ordered worldwide last year, South Korea won contracts for 32, while China secured only 3.

However, the industry views last month’s performance as China absorbing part of the LNG carrier orders by pushing a low-price strategy.

An official from the shipbuilding industry said, "Chinese shipyards are offering LNG carrier construction prices about 20 million dollars lower than South Korean shipbuilders," adding, "It appears they have increased LNG carrier orders through price competitiveness."

China is also actively placing ship orders with its domestic shipyards by utilizing state-owned shipping companies. It is pursuing the localization of LNG carrier technology and the development of eco-friendly vessels.

The shipbuilding industry sees last month’s LNG carrier results as a temporary phenomenon and plans to widen the gap with Chinese shipbuilders through leading-edge technology. In a recent report, IBK Investment & Securities stated, "An increase in Chinese LNG carrier orders means that a large-scale LNG order for South Korea is imminent," explaining that "the early-year order boom in China represents the performance of a second-tier league."

A boom cycle in LNG carriers is also anticipated this year. In particular, the resumption of LNG projects originating from the United States is expected to drive up LNG carrier demand over the mid to long term. According to research data from IM Securities, LNG carrier orders are projected to reach 81 vessels this year and 88 vessels in 2027.

South Korean shipbuilders plan to continue securing orders centered on such high value-added vessels, while in the longer term focusing on technology development for ships powered by eco-friendly fuels. Representative examples include LNG dual-fuel propulsion vessels, methanol-powered ships, and ammonia carriers.