With orders for high-value-added vessels such as liquefied natural gas (LNG) carriers declining sharply, the Chinese and South Korean shipbuilding industries are facing tougher global competition, especially as existing backlogs gradually decrease.
As China’s shipbuilding industry is actively promoting capacity expansion, the speed of ship delivery at Chinese shipyards has been improved, which has also led to a relatively smaller number of future deliveries. For Korean shipyards, although the delivery dates of major shipyards have been scheduled until 2027, the growth rate of orders thereafter has been slow.
Industry data shows that in 2028, Chinese shipyards are expected to deliver 17.03 million compensated gross tonnage (CGT), which is only 63% of the 27.18 million CGTs planned for delivery in 2027. Meanwhile, South Korean shipyards face an even more challenging situation, with an expected delivery volume of 5.42 million CGT in 2028, which is less than 50% of the 11.49 million CGT planned for 2027.
With a decline in shipyard orders on hand, the growth rate of new orders cannot fill the gap. According to Clarkson data, the total global ship orders from January to May 2025 amounted to only 15.92 million CGT, a 45% decrease compared to the same period last year.
The slowdown in new ship orders is mainly concentrated in the LNG carrier and liquefied petroleum gas (LPG) carrier markets, which were once “explosive”. In the first five months of 2025, global LNG carrier orders fell 88% year-on-year to only 670,000 CGT; LPG carrier orders fell 76% year-on-year to 500,000 CGT.
Some analysts said that the slowdown in orders was mainly due to two factors: the high cost of new ships and the large number of ships ordered during the COVID-19 pandemic. The Clarksons New Ship Price Index rose to 187.23 in early June, approaching the historical peak of 191.6 set in 2008. Prices have continued to rise since December 2020, when the index was 125.
Some analysts said that the slowdown in orders was mainly due to two factors: the high cost of new ships and the large number of ships ordered during the COVID-19 pandemic being delivered. The Clarksons New Ship Price Index rose to 187.23 in early June, approaching the historical peak of 191.6 set in 2008. Prices have continued to rise since December 2020, when the index was 125.
If this trend continues, some industry insiders warn that global ship orders for the year could fall to less than half of 2024 levels.
This round of slowdown in orders will pose new challenges to South Korean shipbuilding companies, especially as Chinese shipyards have significantly expanded their production capacity and have begun to actively compete for new orders to fill ship slots.
In terms of annual production capacity, Chinese shipyards jumped from 14.9 million CGT in 2021 to 21.88 million CGT in 2024, an increase of 47%. During the same period, South Korean shipyards’ annual production capacity grew by only 9%, while Japan’s declined by 10%.
An industry insider said: “China is taking on a large number of orders by building new shipyards or expanding existing ones. Once the orders on hand are delivered quickly, there will be overcapacity in the shipyards, which will make the global shipbuilding industry face more intense competition.”