China's Shipbuilding Industry Secures 85% of Global Orders in Q1

Impact of the Iran conflict... Orders triple
South Korea ranks second with 12.8% market share

In the first quarter of this year, China's shipbuilding order volume increased by about three times. Although the United States is working to curb China's growing dominance in the shipbuilding industry, it appears this has not had a significant impact on China's ability to secure new orders.

According to a report by the South China Morning Post (SCMP) on May 11 (local time), citing data from the China Association of the National Shipbuilding Industry, Chinese shipbuilders secured new orders totaling 59.53 million DWT (deadweight tons) in the first quarter of this year. This represents an increase of 195.2% compared to the same period last year. China's market share reached 84.9%. The market shares of South Korea and Japan, which ranked second and third, were 12.8% and 1.4%, respectively.

Container ship departing from Qingdao Port, Shandong Province, China. Photo by AFP Yonhap News.

SCMP reported that China's order book expanded significantly due to rising international demand. Export ships accounted for 94.9% of new contracts in terms of DWT. Experts analyzed that the surge in new tanker orders was driven by the war between the United States and Israel and Iran, and that the possibility of the U.S. reimposing port fees targeting China-related vessels also affected orders. According to a research note published by HSBC at the end of last month, global new ship orders in the first quarter of this year increased by about 40% year-on-year based on CGT (Compensated Gross Tons). Among these, new tanker contracts accounted for 32% of all orders. There were 75 orders for Very Large Crude Carriers (VLCCs) in the first quarter of this year, marking a record high for a single quarter.

Xuyi, a shipping analyst at Haitong Futures in China, explained that tankers were the main driver of China's increase in orders, while demand in other sectors, such as replacement of aging bulk carriers, also played a role. Analyst Xuyi said, "In addition to a complete industrial supply chain and reliable delivery times, China is rapidly advancing technology in dual-fuel systems and energy efficiency, attracting shipowners' attention," and added, "As energy costs continue to rise, improving fuel efficiency is a key factor for shipping companies pushing to modernize their fleets."

HSBC pointed out that customers do not perceive U.S. port fee risks as significant, which has also contributed to Chinese shipyards expanding their market share. The United States decided to impose additional port entry fees on Chinese vessels in October last year, prompting China to take retaliatory measures. Subsequently, during a summit held in Busan, the leaders of the two countries agreed to suspend the collection of these fees from November last year as part of a trade war truce.

Although the U.S.-China trade war is currently in a truce, the United States continues to keep China's shipbuilding industry in check and is strengthening cooperation with South Korea to revive its own shipbuilding sector, including launching the "MASGA (Make American Shipbuilding Great Again) Project." On May 8, the two countries signed a memorandum of understanding (MOU) to launch the "Korea-U.S. Shipbuilding Partnership Initiative (KUSPI)."

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