South Korea’s shipyards are poised to be overtaken by Japanese competitors in order backlogs for the first time in 17 years, preliminary data from a global shipping information firm showed on Wednesday.
According to tentative data from UK-based Clarkson Research Service, South Korea’s backlogged orders stood at 19.91 million compensated gross tonnages, a measurement to gauge the amount of work that goes in the construction of a vessel, as of the end of December 2016. It compares with Japan’s projected 20.64 million CGTs.
A figure below 20 million CGT in remaining order backlogs had not been seen since July 2003 by Korean shipbuilders.
South Korea’s annual order backlog remained above 30 million CGTs throughout 2015 but were hit hard hardest by the global market recession.
The overturn was predicted throughout 2016. In April, South Korean shipbuilders failed to receive a single order for the first time in history. Although the recession and low demand hit all top three countries hard, South Korea suffered the most which forced the shipbuilders into severe restructuring. While China is armed with price competitiveness, Japan has managed to reduce impact with the depreciation of the Japanese yen and an increase in orders from local shippers.
South Korea had been the world‘s top in the shipbuilding industry since 2003 when it topped all three areas of shipping -- new orders, order backlogs and shipbuilding tonnage. South Korea handed over its top spot to China in 2012. China’s shipyards in remaining order backlogs are above 30 million CGTs as of the end of December, according to Clarkson.
Industry experts predict that the shipbuilding sector is not likely to recover until 2020.
By Park Ga-young (firstname.lastname@example.org)