China's new orders hit 120 million DWT in first half

Competition extends to high-value vessels

Massive order backlog accelerates production expertise

Korean shipbuilders stake future on advanced technology

A Chinese shipyard. [Yonhap]
A Chinese shipyard. [Yonhap]

China's shipbuilding industry is leveraging its enormous order volume to build production capacity while pushing into high-value vessels such as LNG carriers. Chinese shipbuilders have widened their order gap with South Korea on the strength of price competitiveness and production scale, and are now rapidly closing the technology and quality gap — a development heightening anxiety across the Korean shipbuilding sector.

According to the China Association of the National Shipbuilding Industry and other sources, Chinese shipbuilders secured 121.06 million deadweight tons of new vessel orders in the first half of this year — a 173.1 percent increase from the same period last year and equivalent to 82.3 percent of all new global orders during that period. Analysts say the surge in order volume is rapidly accumulating shipbuilding experience and production know-how across the Chinese industry.

China's growing competitiveness extends beyond raw order volume. As production efficiency and construction experience accumulate, Chinese yards are expanding into high-value vessels where South Korea has traditionally held an edge — most notably LNG carriers. China has broadened its large LNG carrier construction base beyond the established hub of Hudong-Zhonghua Shipbuilding to include Yangzijiang Shipbuilding, Jiangnan Shipyard, Dalian Shipbuilding and China Merchants Industry. With Hengli Heavy Industry now also entering large LNG carrier construction, the number of Chinese shipyards capable of building such vessels is expected to reach six.

Hengli Heavy Industry's moves are drawing particular attention. The company is pursuing entry into the LNG carrier market by building two large LNG carriers through its own investment and then selling them to shipowners. It has already demonstrated technical capability in large gas carrier construction as it expands into high-value vessels. In June, it launched a 93,000-cubic-meter very large ammonia carrier built on a slipway rather than in a dry dock.

China targets high-value market as Korea pushes for decisive tech edge

China's presence in the LNG carrier market is also growing. South Korea held a 65.5 percent share of global LNG carrier orders in the first half of this year, with China at 34.5 percent. Korea still leads, but the gap is narrowing as China's share rises quickly.

LNG carriers require a high level of technical expertise, and some analysts say it is premature to conclude that Chinese shipbuilders have caught up with Korea. Even so, the domestic industry is on alert because China is already pursuing technological advancement from a position of substantial order backlog. As of the end of the first half of this year, China held 363.25 million DWT in outstanding orders — a 54.9 percent increase from the same period a year earlier.

South Korean shipbuilders are also accelerating efforts to secure competitiveness in high-value vessels. HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean and Samsung Heavy Industries are expanding their technology development beyond advanced LNG carriers to cover the entire LNG value chain, including production, storage and transportation.

At the recently held Gastech 2026, all three Korean shipbuilders unveiled a series of next-generation technologies, including advanced LNG carriers, floating LNG production facilities and LNG bunkering vessels. HD Hyundai received approval in principle from Lloyd's Register for the design of a future-generation LNG carrier, while Samsung Heavy Industries obtained basic approval for a concept design applying its independently developed natural gas liquefaction system to a floating LNG topside facility. Hanwha Ocean secured concept approval for a standard floating LNG design and launched a joint development project for an LNG bunkering vessel.

Korean shipbuilders are also continuing a strategy of selective ordering focused on high-margin vessel types. As the sales share of high-value vessels such as LNG carriers has grown, the three companies' combined second-quarter operating profit reached a record 2.71 trillion won ($1.99 billion). The improvement was driven by revenue recognition from high-priced vessels and gains in productivity.


keg@heraldcorp.com