Is South Korea's Shipbuilding Order Share Rising Due to US-China Tensions?

Seoul, July 29 (NationPress) South Korean shipbuilders have experienced a remarkable increase in their global order share during the first half of the year, fueled by U.S. sanctions aimed at Chinese competitors, as detailed in a recent industry report.

According to findings from the Export-Import Bank of Korea, South Korea captured 25.1 percent of global shipbuilding orders based on compensated gross tons (CGT) in the January to June timeframe, as reported by Yonhap news agency.

This marks a significant rise from 17.2 percent the previous year, reducing the gap with the leading shipbuilding nation, China, from 51 percentage points to 26.7 percentage points.

Last year, South Korea's annual global order share was at 15 percent, the lowest in eight years.

The current upswing is largely attributed to the recent U.S. trade actions. The U.S. Trade Representative (USTR) has implemented a policy imposing port entry fees on Chinese shipping firms and operators of Chinese-manufactured vessels, effectively discouraging dependence on Chinese shipyards.

In the first half of this year, container ships represented 53.3 percent of South Korea's total order volume of 4.87 million CGT. In contrast, South Korean shipyards managed to secure only two midsize-to-large container ship orders last year.

The report noted, "The transition of orders from Chinese to Korean shipbuilders due to U.S. sanctions has played a pivotal role in boosting Korea's global market share."

Despite the improved performance, the bank emphasized the importance of South Korea's shipbuilding sector leveraging this opportunity to strengthen its core competitiveness for sustained long-term growth.

Additionally, South Korea held the second spot for new global shipbuilding orders in June, according to industry data.

South Korean shipyards secured orders amounting to 1.05 million CGTs for eight vessels, representing 41 percent of the global total of 2.56 million CGTs last month, as per Clarkson Research Services based in London.

China ranked first, claiming 53 percent of the global total.

Regarding order backlog, China leads with 96.82 million CGTs, or 59 percent of the global aggregate of 163.37 million CGTs as of late June, while South Korea follows in second place with 35.42 million CGTs, accounting for 22 percent of the total.

The Clarkson's Newbuilding Price Index, which serves as a gauge for price fluctuations in new ships, reached 187.11 last month, reflecting an increase of 0.42 points from the previous year.