According to Yonhap News Agency, some of the views of the South Korean shipbuilding industry believe that as the U.S. increases its pressure on Chinese shipbuilding industry, the Korean shipbuilding industry is expected to regain its competitiveness in the container ship field.
China has dominated the container ship market in recent years, and with the introduction of the U.S. port fee policy, China’s competitiveness in the container ship market will decline.
A South Korean industry source suggested that as China is catching up strongly in the field of liquefied natural gas (LNG) carriers, Korea’s main ship type, South Korea must seize the opportunity to make full use of the current situation to maximize the benefits in the container ship market.
South Korea’s industry analysts believe that under the impact of U.S. sanctions, South Korea’s shipbuilding industry is expected to benefit from, especially in China to receive a higher share of the container ship market.
According to data released by the Korea Offshore & Shipbuilding Association (KOSHIPA) on April 20, China’s container ship market share has risen from 59.5% in 2021 to 87.8% in 2024. In contrast, South Korea’s market share has dropped sharply from 31.6% in 2021 to 12.1% last year. The global major liner companies have shown a clear trend of leaning towards China in the layout of large container ship orders.
According to Clarksons data, China accounts for as much as 97% of the order book of Mediterranean Shipping Company (MSC), the world’s largest container shipping company; while China accounts for 89%, 59%, 58%, 47% and 36% of the orders of Germany’s Hapag-Lloyd, Maersk, Ocean Network Shipping (ONE), CMA CGM and Evergreen Marine, respectively.
Some analysts have pointed out that if port fees are eventually implemented, container ship carriers may reduce their reliance on China and turn to South Korea to avoid the associated fees.
NICE, South Korea’s largest credit rating agency, recently analyzed in a study: “Based on the estimation of the impact of sanctions on different ship types, the container ship market is expected to be the most affected. In the future, major liner companies may shift container ship orders from China to South Korea.”
In fact, before the U.S. announced port fees, this year has been a lot of container ship orders pouring into the South Korean shipyards.
In January this year, HD Korea Shipbuilding & Offshore Engineering (HD KSOE) won an order for 12 ultra-large container ships with a total value of 3.716 trillion won (about US$ 2.58 billion). It is reported that the order was placed by CMA CGM, the world’s third largest shipping company, and is scheduled to be delivered before December 2028.
Last month, Hanwha Ocean won an order for six 24,000 TEU ultra-large container ships from Evergreen Marine. With a total value of about US$1.6 billion, the cost of a single ship reached a record US$267.3 million, the highest cost ever for ultra-large container ships.
Last year, South Korea’s order share fell to 17%, the lowest in eight years, and the market share gap with China (71%) widened from 40 percentage points in 2023 to 54 percentage points. In the LNG carrier sector, where South Korean shipbuilders dominate, South Korea’s share also fell from 92.6% in 2021 to 57.2% in 2024, while China’s share rose from 7.4% to 42.8%.
NICE pointed out that “if the share of Korean shipbuilding companies’ orders continues to shrink and the demand for LNG carriers slows, it will be unfavorable to maintain the current business level in the long run.” The rating agency suggested that Korean shipyards should capitalize on the impact of the current U.S. sanctions on Chinese shipyards to improve their competitiveness in the container ship market and actively take orders.