As orders for high-value vessels like liquefied natural gas (LNG) carriers fall sharply, both South Korea and China’s shipbuilding industries are bracing for renewed global competition—especially as their existing order backlogs begin to thin.

South Korea’s major shipbuilders remain fully booked through 2027, but orders beyond that are growing at a sluggish pace. In China, where aggressive capacity expansion has fueled rapid output gains in recent years, a steep drop in scheduled deliveries is already looming.

According to industry data, Chinese shipyards are projected to deliver 17.03 million compensated gross tons (CGT) worth of ships in 2028—just 63% of the 27.18 million CGT slated for 2027. South Korean yards face an even steeper decline, with 2028 deliveries currently estimated at 5.42 million CGT, less than half of 2027’s 11.49 million CGT.

Yet even as backlogs shrink, new orders are failing to materialize at a pace needed to fill the gap. Global ship orders from January through May 2025 totaled just 15.92 million CGT, down 45% from the same period last year, according to Clarkson Research.

Much of the slowdown has come in the once-booming LNG and LPG carrier markets. Global orders for LNG carriers fell 88% year-on-year to just 670,000 CGT in the first five months of 2025. LPG carriers dropped 76% to 500,000 CGT over the same period.

Analysts point to two key factors behind the slump: elevated newbuilding prices and a flood of vessel deliveries from orders placed during the COVID-19 pandemic. Clarkson’s Newbuilding Price Index hit 187.23 in early June, nearing the all-time peak of 191.6 set in 2008. Since December 2020—when the index stood at 125—prices have climbed steadily.

If the trend continues, some observers warn that full-year global ship orders could fall to less than half of 2024 levels.

That contraction could spell fresh headwinds for South Korean shipbuilders, particularly as Chinese yards—which have significantly expanded capacity—begin aggressively chasing new orders to fill their slips.

China’s annual newbuilding output jumped from 14.9 million CGT in 2021 to 21.88 million CGT in 2024, a 47% increase. Over the same period, South Korea’s output rose just 9%, while Japan’s declined 10%.

“China has been taking on a massive volume of work by building new shipyards or expanding existing ones,” said Lee Eun-chang, a senior researcher at the Korea Institute for Industrial Economics and Trade. “Once their current backlogs are cleared, we may see an oversupply of shipyard capacity—setting the stage for fiercer global competition.”
Source: Chosun