China is rising fast in the liquefied natural gas (LNG) carrier market, which is dominated by Korean shipbuilders. As dockyards of Korean shipbuilders are fully booked, Chinese shipbuilders are winning orders that Korean companies cannot take.
Chinese shipbuilders took orders for 45 LNG carriers between January and November of this year, according to Clarkson Research. During the same period, the total number of LNG carriers ordered worldwide was 163, with China’s share hitting nearly 30 percent. China’s share of the world’s LNG carrier market remained at 10 percent last year. The three major Korean shipbuilders maintained their No. 1 position by winning 116 ships until November, but their market share fell from 90 percent to 71 percent.
LNG carriers are high value-added vessels that require advanced technology. In order to minimize the amount of LNG lost as gas during transportation, its temperature must be maintained below -163 degrees Celsius. This make the LNG carrier building process complicated. Korean shipbuilders have virtually monopolized LNG carrier orders based on their advanced shipbuilding technology.
However, as Korean shipbuilders became unable to take additional orders due to their fully booked dockyards, Chinese shipbuilders are expanding their share of the market.
Chinese shipbuilders’ capabilities to build LNG carriers are also improving. Last year, only Hudong Shipbuilding was able to build large-scale LNG carriers. But this year, Dalian Shipbuilding and Jiangnan Shipbuilding also joined competition to win LNG carrier orders. Jiangsu Zhenjiang Shipyard is in talks over orders for four LNG carriers.
Based on their shipbuilding capabilities, Chinese shipbuilders have begun winning orders for eco-friendly ships other than LNG carriers. Yangzijiang Shipbuilding has succeeded in winning an order for 12 LNG dual fuel propulsion ships from MSC of Switzerland, the world’s second-largest shipping company.