[Heavy Industry ON] Korean Ship Orders Up 55%, but Share Falls to 16%... China Dominates at 76%

August: Korea’s Market Share Drops to 7%, Lowest Monthly Level of 2026

January–August: China’s Orders Surge 95%, Widening the Gap

Korea’s Order Backlog Grows, but Share Falls to 18%

Newbuilding Price Index at 186.34; VLCC Prices Remai

This year, the shipbuilding order volume for South Korea's shipbuilding industry has increased by more than 50% compared to last year, but its global market share has actually declined. This is because, while global ship orders have significantly recovered, the pace of order growth in China has far outstripped that of South Korea. Last month, South Korea's order market share dropped to just 7%, the lowest monthly figure of the year.

According to Clarkson Research, a British shipbuilding and shipping market analysis firm, the total global shipbuilding order volume in August of this year amounted to 4.2 million CGT (Compensated Gross Tonnage, equivalent to 125 vessels). This represents a 29% decrease from 5.95 million CGT in the previous month and a 24% decline from 5.51 million CGT in August of the previous year.

By country, China secured 3.59 million CGT (107 vessels), accounting for 85% of all global orders. South Korea secured 310,000 CGT (10 vessels), resulting in a market share of only 7%. South Korea's monthly market share this year was 16% in January, 11% in February, 24% in March, 13% in April, 31% in May, 9% in June, 14% in July, and then fell to 7% in August. Moreover, the order volume in August, 310,000 CGT, was the lowest monthly figure so far this year.

Accumulated results show that it is difficult to attribute the situation solely to South Korea's sluggish orders. From January to August this year, total accumulated global orders reached 59.72 million CGT (2,128 vessels), representing a 61% increase compared to 37.19 million CGT (1,568 vessels) in the same period last year. South Korea's accumulated order volume also increased by 55% during the same period, from 6.07 million CGT to 9.38 million CGT.

The issue is that China's growth rate was much steeper. China's order volume from January through August soared by 95%, from 23.22 million CGT last year to 45.39 million CGT this year. As a result, China's market share rose from 62.4% to 76.0%, an increase of 13.6 percentage points. In contrast, even though South Korea's order volume increased significantly, its market share declined by 0.6 percentage points from 16.3% to 15.7%.

This year, total global order volume increased by about 22.53 million CGT compared to last year, with China's increase alone accounting for approximately 22.16 million CGT. This represents 98% of the global net growth. While reductions in orders from Japan and other regions also played a role, this indicates that the expansion in global orders this year has been driven almost entirely by China.

The growing gap between China and South Korea is also evident in long-term trends. From January to August 2022, South Korea secured 12.31 million CGT, accounting for 34.1% of the global market, while China secured 17.98 million CGT for 49.7%. Four years later, this year, South Korea's share has dropped to 15.7%, less than half, whereas China's has surged to 76.0%. During the same period, China's order volume increased by 152%.

It is important to note that South Korea's shipbuilding industry is selectively accepting orders, focusing on high value-added segments such as LNG carriers rather than prioritizing order volume. In fact, major Korean shipbuilders have already secured several years' worth of backlog and are continuing with order strategies that emphasize profitability, contract prices, and contract terms.

However, based solely on August's figures, South Korea did not show superiority even in average CGT per vessel. The average order volume per vessel for South Korea was about 31,000 CGT, lower than China's roughly 34,000 CGT. While CGT is not a direct indicator of ship price or profitability, South Korea's advantage in average CGT per vessel observed in some previous months disappeared in August.

A similar trend was seen in order backlogs. As of the end of August, the global order backlog stood at 216.43 million CGT, an increase of 1.05 million CGT from the previous month. China held 145.39 million CGT, accounting for 67% of the total, while South Korea had 37.96 million CGT, or 18%.

South Korea's own order backlog increased by about 10%, from 34.49 million CGT in August last year to 37.96 million CGT this year. Thus, the volume of backlog itself did not decrease. However, over the same period, China's order backlog rose by 35% from 108.03 million CGT to 145.39 million CGT, causing South Korea's market share to fall from 19.6% to 17.5%, while China's rose from 61.3% to 67.2%.

Ship prices remain at high levels. At the end of August, the Clarkson Newbuilding Price Index was 186.34, up 0.85 points from 185.49 in the previous month. Compared to 145.97 in August 2021, five years ago, this represents an increase of about 28%. However, it still falls short of the record high of 189.20 seen in August 2024.

The trend differs by vessel type. LNG carriers maintained their price at USD 248.5 million, unchanged from the previous month, while very large crude carriers (VLCCs) rose to USD 131 million from USD 130.5 million in the previous month. On the other hand, ultra-large container ships in the 22,000–24,000 TEU class fell to USD 254 million, down from USD 259.5 million the previous month. Compared to August of the previous year, LNG carrier prices declined by 0.6% and container ship prices by 5.9%, while VLCC prices increased by about 4%.

Given that both order volume and order backlog for South Korea's shipbuilding industry are on the rise this year, it is difficult to interpret the decline in market share as an immediate sign of weakened competitiveness. However, it is clear that as China rapidly absorbs the increase in global orders on the back of its overwhelming shipbuilding capacity, the gap in order volume between the two countries is structurally widening. The key variable in the future competition between South Korea and China in shipbuilding will be how South Korea, focused on high-value-added vessels, defends its profitability while responding to China's rapid expansion in production scale.

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