Chinese shipmakers threaten Korea's high-value builders
Chinese shipbuilders, which have until now concentrated on making low-cost bulk cargo ships, have recently turned to high-value ships, such as very large crude carriers (VLCCs), liquified natural gas (LNG) ships, container ships and other vessels that are the cornerstone of Korea's shipbuilding industry.
In 2004, China had a share of just 19 percent of the market for VLCCs, which cost on average US$130 million. Last year, however, thanks to an increase in orders China's share of the VLCC market increased to 36.2 percent, not far below Korea's 40 percent share.
Most of China's VLCCs were produced at the China Shipbuilding Industry Corporation's Dalian shipyard, but six new shipyards are going online including one at Changxing. The number of large docks in China that can build VLCCs will increase from the current nine to more than 30, more than twice the number of such docks in Korea.
China is also moving into the market for LNG ships, high-value vessels that cost more $200 million. Hudong-Zhonghua Shipbuilding of the China State Shipbuilding Corporation will finish building an LNG ship with a capacity of 147,000 cubic meters in October. China's shipbuilders are learning the LNG shipmaking trade for projects that will transport LNG from Australia to Guangdong.
The market for LNG ships is currently dominated by shipbuilders in Korea, where 116 of the 149 LNG ships ordered around the world from 2004 to the first half of 2006 were built, for 78 percent of the market.
Although the Korean shipbuilding industry is about 10 years ahead of China's in terms of technology, Korea's shipbuilders are worried as aggressive investment is bringing rapid growth to China's shipbuilding industry.
In 2004, China had a share of just 19 percent of the market for VLCCs, which cost on average US$130 million. Last year, however, thanks to an increase in orders China's share of the VLCC market increased to 36.2 percent, not far below Korea's 40 percent share.
Most of China's VLCCs were produced at the China Shipbuilding Industry Corporation's Dalian shipyard, but six new shipyards are going online including one at Changxing. The number of large docks in China that can build VLCCs will increase from the current nine to more than 30, more than twice the number of such docks in Korea.
China is also moving into the market for LNG ships, high-value vessels that cost more $200 million. Hudong-Zhonghua Shipbuilding of the China State Shipbuilding Corporation will finish building an LNG ship with a capacity of 147,000 cubic meters in October. China's shipbuilders are learning the LNG shipmaking trade for projects that will transport LNG from Australia to Guangdong.
The market for LNG ships is currently dominated by shipbuilders in Korea, where 116 of the 149 LNG ships ordered around the world from 2004 to the first half of 2006 were built, for 78 percent of the market.
Although the Korean shipbuilding industry is about 10 years ahead of China's in terms of technology, Korea's shipbuilders are worried as aggressive investment is bringing rapid growth to China's shipbuilding industry.