South Korea ranks second in August ship orders behind China as yards focus on profitability

South Korea’s shipbuilding industry ranked second behind China in global vessel orders in August, but the gap reflects a deliberate focus on profitability rather than a lack of work. Korean yards have secured more than three years of orders and are continuing to select only vessels with strong profit potential.

Global orders totaled 4.2 million compensated gross tons across 125 ships in August, down 24% from the same month last year, according to British shipbuilding and shipping market analyst Clarkson Research. South Korean companies won orders for 310,000 compensated gross tons, or 10 vessels, compared with China’s 3.59 million compensated gross tons and 107 vessels.

China also led the cumulative January-to-August figures, with 45.39 million compensated gross tons across 1,672 vessels. South Korea recorded 9.38 million compensated gross tons across 243 vessels during the period. At the end of August, however, Korean yards held an order backlog of 37.96 million compensated gross tons, an increase of 3.47 million tons from a year earlier. China’s backlog reached 145.39 million compensated gross tons.

Newbuilding prices continued to rise. Clarkson’s newbuilding price index reached 186.34 at the end of August, up 0.85 points from the previous month. Prices stood at $248.5 million for liquefied natural gas carriers and $131 million for very large crude carriers.

HD Korea Shipbuilding & Offshore Engineering, the country’s largest shipbuilding group, had achieved 77.6% of its annual order target of $23.31 billion, the report said. Hanwha Ocean also secured orders worth a combined 2.0305 trillion won over the previous two days, reinforcing the industry’s emphasis on selective, higher-value contracts.