Korean shipyards have worst slump in four years and are put under common order drought

South Korean shipbuilders won less than half the new orders in the first half of 2020, compared to the same period last year – 92 ships in 2019 and 37 in 2020. 

According to data from UK-based marine industry tracker Clarkson Research Services, global shipbuilding orders in the January-June period totaled 5.75 million compensated gross tons (CGTs) which is 269 ships.  

That’s a mere 42% of the levels experienced in the same period last year. It is also a 25% drop from 7.66 CGTs in the first half of 2016, when the shipbuilding industry suffered deep recession.

By country, Korea logged orders totaling 1.18 million CGTs, or 37 ships, behind Chinese shipyards with 3.51 million CGTs or 145 ships. 

In the first half of last year, Korean shipyards won 92 vessel orders and in the first half of 2018 they won 150 vessels. Even during the first half of 2016, when the shipbuilding industry faced a severe slump, Korean shipbuilders brought home orders for 30 ships.

By value, Korean shipbuilders won $3 billion worth of orders and Chinese players $6.9 billion. The unit cost per vessel for Korea was $80 million, 60 percent higher than China’s $50 million.

But the gap between China and Korea has been narrowing, data showed. By country, Chinese shipbuilders won orders totaling 460,000 CGTs, followed by Korean players with 250,000 CGTs, and Taiwanese shipyards 40,000 CGTs.

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13th July 2020