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Business Standard
17-07-2025
- Business
- Business Standard
Why is China losing its shipbuilding dominance: Trump or global slowdown?
The longstanding dominance of China in the global shipbuilding industry has weakened sharply in the first half of 2025. Latest industry data, as cited by the South China Morning Post, shows that Chinese shipyards — which traditionally account for the largest share of new ship orders globally — have recorded a steep fall in new business this year. According to Clarksons Research, new ship orders for Chinese shipyards plunged 68 per cent year-on-year to 26.3 million deadweight tonnes (dwt) in the first six months of 2025. This marks one of the steepest declines in recent years. In contrast, South Korea — world's second-largest shipbuilding nation — saw a relatively modest drop of 7 per cent over the same period, receiving new orders totalling 14.2 million dwt, the report said. Who is replacing China's shipbuilding dominance? Although South Korea also experienced a drop in orders, it narrowed the gap to China in relative terms. China's share of global new ship orders in the first half of 2025 fell from 75 per cent to 56 per cent year-on-year. South Korea's share rose from 14 per cent to 30 per cent over the same period. Although China still remains the largest volume player, this represents a substantial rebalancing of the global shipbuilding market. Experts included in the report suggested that Korean and Japanese shipyards have benefited from shipowners' decisions to build boats outside of China based on increased geopolitical tension. South Korea's major players, including Hyundai Heavy Industries (HHI) and Hanwha Ocean, have also increased their presence in the US market. Both companies have been bidding for contracts related to the maintenance and overhaul of US Navy vessels since 2024. In April this year, HHI signed an agreement to share technology and cooperate with Huntington Ingalls Industries, the largest military shipbuilder in the US. Are Trump's tariffs hurting Chinese shipyards? The report pointed to a combination of factors behind China's falling market share. One of the clearest drivers has been the series of measures by the Donald Trump-led US administration targeting China's shipbuilding sector. In April this year, the US imposed steep fees on ships owned, operated or built by Chinese companies entering American ports. Additional tariffs on Chinese-made equipment used in shipbuilding, including ship-to-shore cranes, have further strained Chinese shipyards' competitiveness. While these restrictions have met with resistance from industry groups, market data suggests they are beginning to have an effect. Beyond ship construction, Chinese shipyards are also losing ground in repair and maintenance services. Data shows China's share of repair work for very large crude carriers (VLCCs) fell from an average of 70 per cent between 2021 and 2024 to around 50 per cent in the first half of 2025. Is weakening global demand affecting Chinese shipbuilding? The US restrictions alone do not fully explain the shift. Analysts cited by South China Morning Post note that a cyclical decline in global shipbuilding demand is also impacting Chinese yards disproportionately. During the demand boom between 2021 and 2024, excess orders typically spilled over from capacity-limited Korean and Japanese yards to China's more flexible shipbuilders. However, with global new orders slowing in 2025, that spillover effect has diminished. Shipowners reportedly prefer Korean or Japanese-built vessels as they fetch higher resale values on the second-hand market, further compounding the downturn for Chinese shipyards. Despite the current slump, larger Chinese shipyards are expected to remain resilient. However, the outlook is less certain for smaller, private yards with weaker order books.
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Business Standard
17-07-2025
- Business
- Business Standard
Why is China losing its shipbuilding dominance? Trump or global slowdown?
The longstanding dominance of China in the global shipbuilding industry has weakened sharply in the first half of 2025. Latest industry data, as cited by the South China Morning Post, shows that Chinese shipyards — which traditionally account for the largest share of new ship orders globally — have recorded a steep fall in new business this year. According to Clarksons Research, new ship orders for Chinese shipyards plunged 68 per cent year-on-year to 26.3 million deadweight tonnes (dwt) in the first six months of 2025. This marks one of the steepest declines in recent years. In contrast, South Korea — world's second-largest shipbuilding nation — saw a relatively modest drop of 7 per cent over the same period, receiving new orders totalling 14.2 million dwt, the report said. Who is replacing China's shipbuilding dominance? Although South Korea also experienced a drop in orders, it narrowed the gap to China in relative terms. China's share of global new ship orders in the first half of 2025 fell from 75 per cent to 56 per cent year-on-year. South Korea's share rose from 14 per cent to 30 per cent over the same period. Although China still remains the largest volume player, this represents a substantial rebalancing of the global shipbuilding market. Experts included in the report suggested that Korean and Japanese shipyards have benefited from shipowners' decisions to build boats outside of China based on increased geopolitical tension. South Korea's major players, including Hyundai Heavy Industries (HHI) and Hanwha Ocean, have also increased their presence in the US market. Both companies have been bidding for contracts related to the maintenance and overhaul of US Navy vessels since 2024. In April this year, HHI signed an agreement to share technology and cooperate with Huntington Ingalls Industries, the largest military shipbuilder in the US. Are Trump's tariffs hurting Chinese shipyards? The report pointed to a combination of factors behind China's falling market share. One of the clearest drivers has been the series of measures by the Donald Trump-led US administration targeting China's shipbuilding sector. In April this year, the US imposed steep fees on ships owned, operated or built by Chinese companies entering American ports. Additional tariffs on Chinese-made equipment used in shipbuilding, including ship-to-shore cranes, have further strained Chinese shipyards' competitiveness. While these restrictions have met with resistance from industry groups, market data suggests they are beginning to have an effect. Beyond ship construction, Chinese shipyards are also losing ground in repair and maintenance services. Data shows China's share of repair work for very large crude carriers (VLCCs) fell from an average of 70 per cent between 2021 and 2024 to around 50 per cent in the first half of 2025. Is weakening global demand affecting Chinese shipbuilding? The US restrictions alone do not fully explain the shift. Analysts cited by South China Morning Post note that a cyclical decline in global shipbuilding demand is also impacting Chinese yards disproportionately. During the demand boom between 2021 and 2024, excess orders typically spilled over from capacity-limited Korean and Japanese yards to China's more flexible shipbuilders. However, with global new orders slowing in 2025, that spillover effect has diminished. Shipowners reportedly prefer Korean or Japanese-built vessels as they fetch higher resale values on the second-hand market, further compounding the downturn for Chinese shipyards. Despite the current slump, larger Chinese shipyards are expected to remain resilient. However, the outlook is less certain for smaller, private yards with weaker order books. What lies ahead for global shipbuilding? Chinese-built vessels still comprise 23 per cent of the total global fleet currently in service, Clarksons' data shows. But with US restrictions intensifying and South Korea deepening shipbuilding cooperation with Washington, industry analysts suggest that China's shipyards may face prolonged pressure.
The Star
13-07-2025
- Business
- The Star
China's lead in global shipbuilding may already be fading, new data suggests
China's dominance of global shipbuilding appears to have been eroded over the past six months, according to the latest industry data, suggesting that US efforts to rein in the country's shipyards may be starting to bite. China has been by far the world's largest shipbuilder for years, but its shipyards saw new orders plunge 68 per cent year on year to 26.3 million deadweight tonnes in the first half of 2025, according to a Monday report from maritime consultancy Clarksons Research. South Korea, the second-largest player in the industry, saw new orders decline by 7 per cent year on year to 14.2 million deadweight tonnes, but that meant the country gained ground against China in relative terms. China secured 56 per cent of global new orders in the first half of the year, down from 75 per cent a year earlier, while South Korea's share rose from 14 per cent to 30 per cent, according to the Post's calculations. Analysts said China's shrinking market share was being driven by US curbs targeting its shipbuilding industry, as well as a broader downturn in global demand. This decline is largely attributed to concerns among shipowners worldwide over US measures targeting China's shipbuilding industry 'This decline is largely attributed to concerns among shipowners worldwide over US measures targeting China's shipbuilding industry and their subsequent efforts to adapt,' said Han Ning, general manager of the Singapore branch of SHIPBID, a ship bidding platform. Washington has announced a string of measures targeting Chinese shipbuilders this year, as US President Donald Trump vowed to revitalise America's shipyards and curtail China's dominance of the industry. In April, the US announced it would charge steep fees to any ships owned, operated or built by China entering an American port. It has also placed high tariffs on Chinese-made equipment used by shipyards, such as ship-to-shore cranes. The measures have provoked strong industry backlash, but they appear to have had an impact on the market. In addition to shipbuilding, Chinese shipyards have also seen their market share decline in vessel repair and maintenance, according to Han. China's share in the repair and maintenance of very large crude carriers – a type of oil tanker – averaged about 70 per cent between 2021 and 2024, but fell to roughly 50 per cent in the first half of this year, Han added. But a cyclical drop in global demand is also a key driver behind China's falling market share, according to Ralph Leszczynski, head of research for shipbroking and shipping services group Banchero Costa. During periods of high demand – such as from 2021 to 2024 – orders that cannot be handled by Korean and Japanese shipyards, which have strictly limited capacity, often spill over into the more flexible Chinese market, he explained. However, the number of new orders has significantly dropped after the boom of the previous few years, meaning that there has been less of a spillover effect in 2025. Shipowners often prefer vessels made by Korean or Japanese shipyards as they are easier to sell on the second-hand market, according to Leszczynski. 'Large and well-established Chinese shipyards have little to worry about,' Leszczynski said. 'But this situation should be of concern to smaller, private yards with a smaller track record.' Chinese-built vessels account for 23 per cent of the total global fleet in service, according to Clarksons. The US drive to revive its shipbuilding industry is widely seen as an opportunity for South Korea. With America having practically zero domestic capacity, Korea's top shipbuilders are now expanding in the US. Hyundai Heavy Industries (HHI) and Hanwha Ocean, two major South Korean shipbuilders, have joined bids for contracts to maintain, repair and overhaul US Navy vessels since last year. In April, HHI signed a memorandum of understanding to accelerate cooperation and technology sharing with Huntington Ingalls Industries, the largest military shipbuilder in the US. Despite ongoing trade tensions, South Korea and the US were deepening cooperation – particularly in shipbuilding – as Washington ramped up restrictions on China, South Korean President Lee Jae-myung said in March. Lee, who took office last month, has also pledged to make South Korea 'a maritime power that leads the world, beyond shipbuilding'. - SOUTH CHINA MORNING POST
South China Morning Post
09-07-2025
- Business
- South China Morning Post
China's lead in global shipbuilding may already be fading, new data suggests
China's dominance of global shipbuilding appears to have been eroded over the past six months, according to the latest industry data, suggesting that US efforts to rein in the country's shipyards may be starting to bite. Advertisement China has been by far the world's largest shipbuilder for years, but its shipyards saw new orders plunge 68 per cent year on year to 26.3 million deadweight tonnes in the first half of 2025, according to a Monday report from maritime consultancy Clarksons Research. South Korea, the second-largest player in the industry, saw new orders decline by 7 per cent year on year to 14.2 million deadweight tonnes, but that meant the country gained ground against China in relative terms. China secured 56 per cent of global new orders in the first half of the year, down from 75 per cent a year earlier, while South Korea's share rose from 14 per cent to 30 per cent, according to the Post's calculations. Analysts said China's shrinking market share was being driven by US curbs targeting its shipbuilding industry, as well as a broader downturn in global demand. This decline is largely attributed to concerns among shipowners worldwide over US measures targeting China's shipbuilding industry Han Ning, manager of ship bidding platform 'This decline is largely attributed to concerns among shipowners worldwide over US measures targeting China's shipbuilding industry and their subsequent efforts to adapt,' said Han Ning, general manager of the Singapore branch of SHIPBID, a ship bidding platform.
South China Morning Post
14-02-2025
- Business
- South China Morning Post
How will Trump's reciprocal tariffs affect Chinese shipping lines?
Chinese shipping lines and container manufacturers are facing further challenges and geopolitical uncertainties after US President Donald Trump rolled out a plan on Thursday to levy reciprocal tariffs on America's trade partners. The Shanghai Containerised Freight Index, a key benchmark for global shipping rates compiled by the Shanghai Shipping Exchange, fell 7.27 per cent last week to 1,758.82, marking its fifth consecutive weekly decline. The index peaked at 3,733.80 in July, as global shipping was affected by the Red Sea crisis . Houthi militants in Yemen launched attacks on shipping in the Red Sea, which leads to the Suez Canal, after the Israel-Gaza war began in October 2023. Stephen Gordon, managing director at shipping data provider Clarksons Research, attributed the drop in the index to seasonal factors, saying freight volumes had eased during China's Lunar New Year holiday. Container shipping rates rose in the fourth quarter of last year as businesses rushed to ship goods before the holiday and before new tariffs could be imposed by the United States. According to a report released by Clarksons on Monday, additional 10 per cent tariffs on imports from China imposed by Trump earlier this month could have an impact on up to 90 million tonnes of seaborne trade, accounting for 0.7 per cent of global maritime shipments. Gordon said container shipping was among the sectors most exposed to new US tariffs.
