By Choi Sung-jin
While domestic shipbuilders recorded one of their worst performances last year because of failures in the offshore plant business, they also suffered a dearth of new orders, darkening the outlook for years to come, industry sources say.
According to Clarksons, a British agency analyzing the shipping and shipbuilding industry, Korean shipyards received orders totaling 10.15 million CGT (compensated gross tonnage) last year, 100,000 fewer than the 10.25 million recorded by their Chinese competitors. Japan came third with 9.14 million.
Korea reduced the gap with China, which has topped the order-receiving list since 2012. In the second half of last year, however, the difference was shocking: Korean berths managed to win 3.43 million CGT in the Jan.-June period, less than half of China's 6.92 million and even lagged Japan's 4.24 million.
"In the first six months of 2015, Korea's order receipts almost doubled those of China but the table completely turned around in the latter half-year," said a shipbuilding industry executive. "The three largest domestic shipyards, discouraged by massive losses, seemed to be less than eager to win new orders."
Also, Chinese companies began to gain ground in the high value-added shipbuilding market, such as very large crude and container carriers (VLCCs), which had been all but monopolized by Korean shipyards. Japan also increased its share in the VLCC market from 16.5 percent in 2013 to 27.1 percent last year.
All this explains why the combined losses of Korea's big-three shipyards amounted to a record 8 trillion won ($6.6 billion) last year, sources said. The loss in 2014 was 2 trillion won. Smaller shipbuilders, such as Hanjin Heavy Industries, STX and SPP, are barely staying afloat with financial support from the government or state-run banks.
"Korean shipbuilders, who have handed over their market-leading status to their Chinese rivals, received a double punch from the industry slump," said the executive. "It will be difficult for them to get out of the crisis easily, as new orders are unlikely to increase this year, too."
While domestic shipbuilders recorded one of their worst performances last year because of failures in the offshore plant business, they also suffered a dearth of new orders, darkening the outlook for years to come, industry sources say.
According to Clarksons, a British agency analyzing the shipping and shipbuilding industry, Korean shipyards received orders totaling 10.15 million CGT (compensated gross tonnage) last year, 100,000 fewer than the 10.25 million recorded by their Chinese competitors. Japan came third with 9.14 million.
Korea reduced the gap with China, which has topped the order-receiving list since 2012. In the second half of last year, however, the difference was shocking: Korean berths managed to win 3.43 million CGT in the Jan.-June period, less than half of China's 6.92 million and even lagged Japan's 4.24 million.
"In the first six months of 2015, Korea's order receipts almost doubled those of China but the table completely turned around in the latter half-year," said a shipbuilding industry executive. "The three largest domestic shipyards, discouraged by massive losses, seemed to be less than eager to win new orders."
Also, Chinese companies began to gain ground in the high value-added shipbuilding market, such as very large crude and container carriers (VLCCs), which had been all but monopolized by Korean shipyards. Japan also increased its share in the VLCC market from 16.5 percent in 2013 to 27.1 percent last year.
All this explains why the combined losses of Korea's big-three shipyards amounted to a record 8 trillion won ($6.6 billion) last year, sources said. The loss in 2014 was 2 trillion won. Smaller shipbuilders, such as Hanjin Heavy Industries, STX and SPP, are barely staying afloat with financial support from the government or state-run banks.
"Korean shipbuilders, who have handed over their market-leading status to their Chinese rivals, received a double punch from the industry slump," said the executive. "It will be difficult for them to get out of the crisis easily, as new orders are unlikely to increase this year, too."
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