May Ship Orders Down 60%... Impact of Reduced Domestic Orders in China

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] In May, global ship orders significantly decreased compared to the previous month, while South Korea maintained a similar level. The order share gap between South Korea and China narrowed from 55 percentage points to 7 percentage points.

According to Clarkson Research, a shipbuilding and shipping market analysis firm, global ship orders in May totaled 570,000 CGT (27 vessels), down 40% from the previous month (1.41 million CGT). Among these, China ordered 270,000 CGT (13 vessels, 47%), South Korea 230,000 CGT (8 vessels, 40%), and Japan 50,000 CGT (2 vessels, 9%) in that order.

While South Korea's order volume remained similar to April, China's orders, which decreased in domestic volume, plummeted by 73%, narrowing the monthly order share gap between South Korea and China from 55 percentage points in April (South Korea 16%, China 71%) to 7 percentage points.

Of China's 270,000 CGT (13 vessels) orders, 230,000 CGT (10 vessels, 85%) were domestic, whereas South Korea's entire order volume came from European and Asian shipowners.

From January to May this year, cumulative orders by country were led by China with 2.88 million CGT (121 vessels, 62%), followed by South Korea with 900,000 CGT (32 vessels, 19%), and Japan with 490,000 CGT (31 vessels, 11%). China, still relying heavily on domestic orders, maintains a significant lead.

However, with recent large-scale LNG carrier dock slot reservation contracts signed with Qatar, it is expected that South Korea's market share will significantly increase in the second half of the year as large LNG project orders from Qatar, Russia, Mozambique, and others accelerate.

The cumulative ship orders from January to May over the past three years were 15.82 million CGT in 2018, 12.17 million CGT in 2019 (down 23%), and 4.69 million CGT in 2020 (down 61%).

By ship type, orders for S-Max class tankers and A-Max class tankers increased by 18% (330,000 CGT → 390,000 CGT) and 72% (290,000 CGT → 500,000 CGT) respectively compared to the previous year, while orders for Very Large Crude Carriers (VLCC), container ships, and bulk carriers decreased.

At the end of May, the global order backlog stood at 72.25 million CGT, down 1.22 million CGT (2%) from the previous month. South Korea (down 3%), Japan (down 2%), and China (down 1%) all saw slight decreases.

Compared to the same period last year, Japan's backlog decreased by 5.24 million CGT (down 34%), China's by 3.73 million CGT (down 12%), and South Korea's by 1.51 million CGT (down 7%).

By country, China maintained the top position with 26.24 million CGT (36%), followed by South Korea with 20.22 million CGT (28%), and Japan with 10.24 million CGT (14%).

By shipyard, Samsung Heavy Industries had the largest order backlog at 5.76 million CGT, followed by Hyundai Heavy Industries with 4.54 million CGT, and Daewoo Shipbuilding & Marine Engineering with 3.89 million CGT.

This content was produced with the assistance of AI translation services.