Global Economy: Shipbuilding Industry Forecast
Global Economy: Shipbuilding Industry Forecast
  • 아이콘뉴스
  • 승인 2019.10.24 15:24
  • 댓글 0
이 기사를 공유합니다

Korean shipbuilding industry shows signs of recovery
사진kbs

Korean shipbuilders in advantageous position on bid for LNG carriers of Qatar

Korean shipbuilding industry has long been stagnated. Recently, it is showing signs of recovery. Increase in global orders of LNG (Liquefied Natural Gas) ships is encouraging Korean shipbuilders who are received as the topmost competitor of winning the bid for LNG carrier of Qatar. Here I compare weak and strong points of Korean, Chinese and Japanese bidders and what makes Korean’s more advantageous.

The global shipbuilding industry reached its peak in 2007 and showed down falls due to global economic slump. The signs of recovery started to show in 2017 and the orders are increasing gradually ever since. The China’s economic growth and changes of old ships in 2007 put the amount of order to 176 million GT which was record high but fell down to 18 million GT in 2009, a surprising 90% decrease on 2007. And this slow down of overall orders lasted until 2016.

Good news came to shipbuilders in 2017. The amount of order for new ships increased due to strengthened international standard for environment. The amount of order increased to 21 million GT in 2016, 56 million GT in 2017 and 59 million GT in 2018. Undoubtedly, South Korea has been the No.1 shipbuilder in the world. However, China’s fast chase is not ignorable. Good news still is that China is behind of South Korea in terms of highly value added ships that require cutting edge techniques and building infrastructure.

So South Korea seems to keep its global No.1 status for a while as predicted its advantageous position in bid for LNG carriers and LNG propeller ships, beating out China and Japan. For the last several decades, South Korean ship builders have showed their excellence by making thousands of ships and their accumulated knowhow and experience have met the needs and wants of global orders without disappointments in terms of quality and time limit.

The toughened international standard for environment has increased amount of order for LNG carriers and LNG propeller ships. Recently, Qatar Petroleum, the state owned Qatar petroleum company, has sent bid proposals for 60 LNG carriers to South Korea (Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries), China and Japan. The bid proposals are part of the Qatar Petroleum’s North Field Expansion Project that will increase the LNG output to 110 million tons by 2024 from the current 70 million tons.

Qatar proposed the price per ship at about 200 billion won (USD 167,294,019 as of May 19, 2019) and the country is to order around 100 ships for the next 10 years. If so, the scale will be the biggest in shipbuilding industry.

“Undoubtedly, the knowledge and technique of South Korean shipbuilders are No.1 in the world. The problem is that the slots might be less than the amount of received orders if the time limits and the building periods are coincided” said an official of Korean shipbuilding industry.

Shipbuilding and semiconductor are the two key industries in South Korea. South Korea has cutting edge shipbuilding knowledge, knowhow and experience and has taken overwhelming position in terms of number of orders received. As of March 2019, South Korea is taking 81% of LNG carriers, 62% of VLCC (Very Large Crude Carrier) and 49% large container ships still being built. The global order amount increased 5.9% in 2018 but it increased 28.6% in South Korea on previous year which is far higher than the global order amount. To be more precise, South Korea is taking 110 million GT out of 140 global GT in LNG carriers which is 81% of the total order amount as of March 2019. Furthermore, South Korea also is the strongest in bidding for VLCC1.

Yet all of this No.1 status has no guarantee to remain as the king of the shipbuilding forever. According to a 2018 report of the Korea Development Bank, the overall technology gap between South Korean shipbuilders and the Chinese counterparts are 5.2 years: Bulker ship 2.5 years, Tanker 4.2 years, Container 4.2 years and LNG carrier 7.0 years. Industry experts point out building a win-win management and strategy network between shipbuilders and related industries is very important in order for South Korean shipbuilders to keep their No.1 status in the field.

For example, steel industries provide highest quality steels to shipbuilders while shipping companies order more of LNG propeller ships in accordance with the toughened international environment standard.

The recent M&A of Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering has raised a check from neighboring countries. We do not know whether this might play advantageous or disadvantageous. What is necessary is that the South Korean government and the industry officials must always be aware of these two key industries and do their best in keeping and promoting its values and interests. Let us not forget that Juyung Chung, the founder of Hyundai Groups, who started Hyundai Heavy Industries with just 500 won coin (USD 0.42 as of May 19, 2019) engraved with the famous Turtle Ship of Admiral Sunsin Yi; and also the fact that South Korean shipbuilding industry has grown world’s No.1 by sweat and blood of the people.


댓글삭제
삭제한 댓글은 다시 복구할 수 없습니다.
그래도 삭제하시겠습니까?
댓글 0
댓글쓰기
계정을 선택하시면 로그인·계정인증을 통해
댓글을 남기실 수 있습니다.