Korea Catches Up With China in Shipbuilding Orders
By Cho Jin-seo
Staff Reporter
South Korean shipbuilders have saved face by catching up with China in the volume of orders during the first five months of the year.
China has emerged as a new powerhouse in the shipbuilding industry and held a brief lead over Korea and Japan until April. But Korea evened up the competition in May. Both countries had cumulative orders of 11.7 million compensated gross tons (CGTs) in the Jan.-May period, according to market researcher Clarkson.
``It is embarrassing to say that we have `caught up' with China, but it looks just like that,'' said an official of the Korean Shipbuilders Association, who didn't want to be named. ``The fact is that Korean companies had been taking a break as they already had secured substantial orders. They resumed receiving new orders for large container ships and bulk carriers in May.''
China was the world's third largest shipbuilder in 2006 after South Korea and Japan, but it took top place this year by sweeping up less profitable orders for bulk carriers and small container ships that dockyards in Korea and Japan had shunned.
In May, most of the newly received orders at Korean builders were large container ships, the association said. Hyundai Heavy Industries, the industry leader, said that it received record-high orders for 24 ships in the month _ 17 of them being container ships. Its monthly sales were up 32 percent from a year ago at 1.33 trillion won.
``Marine transportation firms have recently raised their market forecast while increasing orders for large container carriers,'' a Hyundai media relations official said. He also noted that those simple, large container vessels actually give a larger profit margin to the firm than other good-looking, high-tech ships such as liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers do.
Though it had briefly yielded the No. 1 place to China in receiving new orders, South Korea has remained as a distant leader in terms of total backlog orders. Korean builders have a total of 51.1 million CGTs of remaining orders, while China has 37.1 million CGTs and Japan has 30.4 million CGTs to build. The three East Asian nations accounted for 81.2 percent of the global total.
In construction volume, Korean builders have produced 4.4 million CGTs of ships so far this year, far more than 3.3 million CGTs from Japan and 1.8 million CGTs from China.