Korea may drop to second in the international ranking for shipbuilding exports in 2012, giving the top spot to China for the first time since 2001, the Institute for International Trade said on Thursday.

In the first 10 months of last year, exports of Korean shipbuilders marked $33.5 billion (35.6 trillion won), a 29.5 percent drop from the same period in 2011. It was the first time the nation’s shipbuilding industry posted minus growth since 1999 when the nation was hit hard by the currency and economic crisis.

In the same period, exports of Chinese shipbuilders posted $33.6 billion. Japan remained in third place with $20.3 billion in exports.

The 2012 export rankings of the global shipbuilding industry are not likely to be overturned, considering the orders that the nation’s top three shipbuilding manufacturers won in the fourth quarter last year, the institute said.

Exports of local shipbuilders were hit harder than competitors in China due to a lack of orders in Europe, the biggest market for Korean shipbuilders.

Regardless of the prolonged slump in the shipbuilding industry, affected by the global economic downturn, some industry watchers said it was a matter of time before Korean shipbuilders would be overtaken by fast-growing Chinese shipbuilders armed with cheap ships.

“Small and mid-sized shipbuilders are likely to be hit hard by rising competition from China, while major shipbuilders have shifted their business focus to high-value added offshore plants from shipbuilding,” an official from one of the nation’s top three shipbuilders said on condition of anonymity.

For instance, Daewoo Shipbuilding & Marine Engineering, the world’s second-biggest shipbuilder, reaped 85 percent of the total sales from the offshore plant business in 2012.

In its New Year’s message on Thursday, the top management at Samsung Heavy Industries said the company would generate about 80 percent of revenue from the offshore plant business in 2013.

Hyundai Heavy Industries, the world’s biggest shipbuilder, said one of its top priorities in 2013 was to strengthen its offshore business. Hyundai has been slower in the offshore sector compared with the two local rivals.

The company said that it is targeting $29.7 billion worth of orders this year, up 52.3 percent from last year.

By Seo Jee-yeon (jyseo@hearldcorp.com)