Korea’s Shipbuilding Industry Tops the World

Despite a slow economy and lower demand for new ships, Korea’s shipbuilding orders topped the world for the second consecutive year in 2012 in terms of both volume and monetary value.

According to the Ministry of Knowledge Economy (MKE) and the Korea Shipbuilders’ Association (KOSHIPA), the country’s shipbuilders secured orders worth USD 29.9 billion, equivalent to 7.5 million Compensated Gross Tonnage (CGT), capturing 35 percent of 2012’s global contracts.

China was a close second with 7.1 million CGT or USD 15.5 billion, followed by Japan with 2.9 million CGT or 5.2 billion.

The global economic slowdown in the last few years resulted in a reduction of goods shipped, which again led to a declining demand for new ships. Oversupply was also a contributing factor, as shipping companies bought a large number of ships between 2005 and 2008. According to MKE, the total amount of global orders fell by 36.8 percent on-year to 21.3 million CGT in 2012.

Despite the unfavorable circumstances, Korea’s leading shipbuilders including Hyundai Heavy Industries, Daewoo Shipbuilding and Marine Engineering, and Samsung Heavy Industries excelled in high-value maritime plants and ships such as FPSO (floating production, storage, and offloading) and liquefied natural gas (LNG) carriers. In 2012, Korea’s shipbuilders secured orders for 24 LNG carriers, or 73 percent of the total, and 26 drill ships, or 67 percent.

Daewoo ranked first in terms of the value of total orders, the company said, obtaining USD 14.2 billion of orders, exceeding its original goal of USD eleven billion. Daewoo won a series of orders last year including a USD-1.8-billion order to manufacture a fixed platform, LNG carriers, and Jangbogo III-class submarines.

The ministry also said due to the continued slowdown of the global economy and oversupply in the mid-2000s, it is uncertain whether new ship orders are likely to increase in 2013. However, a growing demand for energy is likely to continue to spur maritime energy development projects and orders for maritime plants, and LNG carriers are expected to grow.According to the ministry, the ten largest shipbuilders in the country expect to win orders worth USD 58.8 billion in 2013, a nine-percent increase over its 2012 goal.

[mappress]

Press Release, January 23, 2013