Global Shipbuilding Industry Enters Downturn, Chinese shipyards is still best.
Recent data reported by Chinese shipyards news shows that in May, global new ship orders totaled only 71 vessels, or 1.66 million compensated gross tons (CGT), a 55% year-on-year decline. This marks the fifth consecutive month of contraction, with each month’s drop exceeding 50%.
Since the beginning of this year, the global new ship market has remained sluggish. Data from Greek shipbroker Allied Shipbroking indicates that new orders in the first four months of 2024 fell to their lowest level in four years.
Chen Jun, Vice Chairman of the Shanghai Society of Naval Architects and Marine Engineers, told Jiemian News that global new ship orders peaked last year and have since begun to decline.
Clarksons Research data shows that in 2024, global new ship orders reached 2,390 vessels, or 65.55 million CGT, hitting a 17-year high. Prior to this, the booming market had already lasted for three years.
As a typical long-cycle industry, shipbuilding is characterized by significant volatility. The current upcycle began in 2021, driven by the replacement of aging vessels from the previous cycle. Additionally, the green transition in shipping has spurred demand for more environmentally friendly ships.
“The industry cannot remain at peak order levels forever. After years of concentrated, large-scale orders, shipowners’ demand has become somewhat saturated, so a decline in orders at this stage is normal,” said Chen Yang, editor-in-chief of maritime information platform Xinde Marine News.
Chen Jun predicts that global new ship orders in 2025 will drop by 20%-25% compared to last year, or even more.
Chen Yang also pointed out that U.S. restrictive policies, such as the “Section 301 investigation” targeting China—the world’s largest shipbuilding nation—have inevitably impacted global new ship orders.
On April 17, the U.S. Trade Representative (USTR) announced measures against China’s maritime, logistics, and shipbuilding sectors, citing alleged “unreasonable practices” in a Section 301 investigation. The proposed restrictions include imposing additional fees on Chinese shipowners, shipping operators, and vessels built in China. The USTR is currently refining the details and soliciting public feedback.
On April 30, bipartisan U.S. lawmakers reintroduced the American Shipbuilding Act, dubbed “Version 2.0” by industry insiders. According to Clarksons Research, the bill expands the scope of port fees beyond the Section 301 measures, targeting not only Chinese-owned or operated vessels but also non-Chinese vessels based on their construction or repair history at specific Chinese shipyards.
Clarksons noted that if passed, the bill’s potential impact could exceed that of the Section 301 restrictions. The legislation has garnered bipartisan support and will be debated in the coming months.
Chen Yang said that while international shipowners remain willing to place orders with Chinese shipyards, the current policy ambiguity and uncertainty have created hesitation. “They may need to wait for clearer signals before making decisions.”
Chinese shipyards Dominance Remains Unshaken
Despite the market downturn and external uncertainties, Chinese shipbuilders continue to lead globally.
In the first five months of 2024, Chinese shipyards secured 274 new orders totaling 7.86 million CGT, accounting for 49% of the global market share by CGT. South Korean shipbuilders, in second place, received 95 orders (3.81 million CGT), holding a 24% market share.
Thanks to absolute advantages in cost, efficiency, production capacity, and supply chains, China has ranked first globally in shipbuilding output, new orders, and order backlogs for 15 consecutive years. Even with the Section 301 restrictions, Chinese shipyards remain attractive to international shipowners.
According to Reference News, despite concerns over port fees for China-linked vessels, global shipping giants like Mediterranean Shipping Company (MSC) still choose to collaborate with Chinese firms, acknowledging their unmatched competitiveness in the short term.
At a recent media event, Knut Ørbeck-Nilssen, Senior Vice President of DNV (the world’s largest classification society), told Jiemian News that while geopolitical uncertainties persist, China’s shipbuilding industry remains irreplaceable—a fact that is “very clear.”
Chen Yang added that while targeted policies may divert some orders, neither traditional shipbuilding powers like South Korea and Japan nor emerging players like India and Southeast Asia can fully absorb the potential outflow from China.
South Korea and Japan face capacity and labor shortages, with the former focusing on high-value vessels like LNG carriers. Meanwhile, India and Southeast Asia’s shipbuilding industries remain underdeveloped and far behind China in overall capability.
“Where can these orders even go?” Chen Yang remarked.
Chen Jun noted that policy challenges will not significantly alter the market shares of China, South Korea, and Japan. China is expected to maintain over 50%, South Korea 30%-40%, and Japan around 10%.
Chen Yang emphasized that Chinese shipbuilders must now “respond to external uncertainties with the certainty of high-quality development.” Strengthening core competitiveness, advancing industrial upgrades, and embracing green and smart shipping trends will ensure China’s shipbuilding industry retains its leading edge now and in the future.
