Chinese Penetrate South Korea’s LNG Carrier Market

Chinese shipbuilders secured approximately 40% of all newly ordered large liquefied natural gas (LNG) carriers worldwide during the first to third quarters of this year, January to September. While China leads in the general merchant ship market, such as container ships and bulk carriers, by leveraging price competitiveness, large high-value-added LNG carriers with a capacity of 174,000 cubic meters or more were considered a market dominated by South Korean shipbuilders, who possess differentiated technology. Chinese shipyards have aggressively penetrated this sector this year.

According to Clarksons Research, a British shipbuilding and shipping analysis institution, as of the third quarter of this year, South Korea has accumulated 173 orders, while China has 71, maintaining a significant gap. However, this year, a clear trend has emerged where China has rapidly strengthened its LNG carrier production capabilities over recent years and is closing the gap at a rapid pace. While the shipbuilding industry notes, “LNG carriers, which remain more profitable, are still ordered from South Korean shipyards,” there is growing tension that complacency could lead to being overtaken.

◇China Overcoming the Gap Through Production Capacity LNG carriers transport gas liquefied at minus 163 degrees Celsius, making cargo containment technology crucial. Key aspects include ensuring airtightness to prevent gas leakage and reliquefaction. While French company GTT virtually monopolizes cargo containment technology, South Korean shipyards with long experience are highly regarded for their welding, construction, and operational technologies that enhance fuel efficiency. Particularly, LNG carriers are difficult to order based solely on price competitiveness, as any issues with the vessel can lead to significant losses.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →