A heavy lift ship, fresh from the shipyard in late April, leaves a port in Shanghai on its maiden voyage, carrying complete components of a vaccine factory exported to Morocco on May 5, 2022. China was the largest builder shipyard in the world in 2021, according to the data. Photo: CGV

Chinese shipbuilders are working around the clock to meet rising global orders as Shanghai, the world’s main shipbuilding production hub, resumes full operations, with some industry analysts expecting the sector Chinese shipbuilding regains the world’s top spot in the second half of this year.

The outbreak in Shanghai has disrupted shipbuilding due to logistical hurdles, quarantine measures and other factors, allowing South Korea to temporarily replace China as the world’s top order market. But industry analysts said Shanghai shipbuilders, which have returned to 70% of normal capacity, will catch up in the second half.

In the first five months of this year, global orders for new vessels amounted to 16.25 million compensated gross tons (CCT). China had 247 vessels and 7.16 million SGCs, with a global market share of 44.1%, down 3.2 percentage points year-on-year, ranking second behind the 45.2% share of South Korea’s market, according to Clarksons Research.

It was the first time since 2018 that South Korea’s global market share exceeded China’s, according to media reports. During the same period last year, the shares of South Korea and China were 36% and 47% respectively.

Analysts said South Korea’s orders for high-value LNG carriers helped it earn the top spot, as did production cuts by some Chinese shipbuilders amid Shanghai’s epidemic controls.

But Chinese shipbuilders will soon regain the top spot as Shanghai resumes full operations and global demand for container ships and LNG carriers continues to rise, driven by the global economic recovery, experts said.

“Shanghai shipbuilders are back to more than 70 percent capacity utilization,” Wu Minghua, an independent Shanghai shipping industry analyst, told the Global Times on Monday, pointing to a supply chain complete, mature production line and self-developed core technologies which are built for years.

The three Shanghai-based domestic shipbuilding conglomerates – Jiangnan Shipyard, Hudong-Zhonghua Shipbuilding (Group) Co and Shanghai Waigaoqiao Shipbuilding Co – have all resumed production.

The glaring gap in shipbuilding orders between the two main producers – China and South Korea – occurred in May as Shanghai was just beginning to resume work and production, while waging a bitter fight against the epidemic.

In May, China won 34% of new orders, surpassed by South Korea’s 48% and followed by Japan’s 17%, according to South Korean news outlet Business Korea.

What Chinese shipbuilders have achieved in recent months has been significant as they have had to deal with supply chain issues and rising raw material prices as well as fighting the epidemic, said analysts.

South Korea overtook China with only a slight 0.1% advantage in cumulative new ship orders from January to April, another reflection of the resilience of China’s shipbuilding industry.

A source from Hudong-Zhonghua Shipbuilding (Group) Co said in a media interview that the world’s largest container ships, which can carry 24,000 standard containers, have made test voyages and are expected to be delivered by mid -June, reported the Shanghai Securities News earlier this month.

Graphic: GT

Since resuming production, the company has delivered three vessels, while exceeding 23 major LNG vessel contracts from January to May with a total value exceeding 30 billion yuan, according to the report.

Shanghai shipyards operated in a closed loop during the epidemic and stockpiled necessary materials in advance, which enabled them to ensure smooth production and delivery in difficult times, Wu said. .

Chen Daxi, from the China Society of Naval Architects and Marine Engineers in east China’s Zhejiang Province, told the Global Times on Sunday that China’s shipbuilding industry remains the world’s No. production capacity and orders, with the Yangtze River Delta, with Shanghai as the center. , accounting for about 70% of the country’s total.

As the global economic recovery gains momentum and port congestion in the United States and Europe persists, as well as the geopolitical situation in Europe, global demand for new vessels will increase, providing a large market for both China and to South Korea, analysts said.

Wu said China is likely to regain the top spot in full-year terms as the business rebound intensifies in the second half.