South Korea’s share of the global shipbuilding market is expected to dip below 20% this year, hitting its lowest level since 2016, according to The Chosun Daily. The country’s order volume is currently just one-fourth of that of its main competitor, China.
While South Korean shipbuilders maintain their lead in high-value sectors like liquefied natural gas (LNG) carriers through selective bidding, their overall market presence has been shrinking as China extends its dominance from containerships and bulk carriers to the LNG market.
In 2018, South Korea led the global shipbuilding industry with a market share of 44%. However, this figure has steadily declined, falling into the 30% range before approaching the 20% threshold. Data from Clarksons Research, a British firm specializing in shipping and shipbuilding analytics, shows that South Korean shipbuilders secured 1,092,000 compensated gross tons (CGT), or 248 vessels, between Jan. and Nov. 2024.
This represents about 18% of the 60,330,000 CGT (2,159 vessels) ordered globally during the period. In contrast, Chinese shipbuilders accounted for 4,177,000 CGT (1,518 vessels), claiming 69% of global orders. South Korea’s 18% share is its lowest since 2016, when it dropped to 15.5% during an industry-wide downturn.
At the time, South Korean and Japanese shipbuilders struggled, while China capitalized on domestic demand to solidify its position. China has secured its foothold in the container and bulk carrier markets through aggressive low-cost strategies and is now making significant inroads into the LNG carrier segment, a domain traditionally dominated by South Korea.
Industry analysts point out that South Korea’s “Big 3″ shipbuilders—HD Korea Shipbuilding & Offshore Engineering (HD KSOE), Hanwha Ocean, and Samsung Heavy Industries (SHI)—currently hold a three-year backlog of orders, keeping their shipyards operating at full capacity.
However, this production ceiling has provided Chinese competitors with an opportunity to expand their presence. After the downturn of the 2010s forced many smaller Chinese shipyards into bankruptcy, larger firms acquired these facilities, substantially boosting their production capacity.
Although South Korea’s orderbook remains robust, China’s growing presence in the LNG carrier market—where it now commands more than 40% of orders—has raised concerns about the long-term sustainability of South Korea’s competitive advantage.
Expanding partnerships with allied nations was also suggested as a strategy to strengthen South Korea’s position in the global market. Geopolitical dynamics may also create new opportunities for South Korean firms. Efforts by the United States and Canada to reduce reliance on China’s shipbuilding industry could drive demand for alternative suppliers.