China, the world’s largest shipbuilder by market share, is expected to receive a raft of new orders as the global industry enters a renaissance, analysts said.
Demand for new ships is expected to surge over the next few years, as shipping companies have a “pressing need” to replace ageing vessels and comply with new environmental regulations, according to Min Joo Kang and Rico Luman, economists at the financial firm ING.
And China is set to be the main beneficiary of this market upswing, with its primary competitor South Korea likely to take a more “cautious” approach by focusing on profitable and reliable orders, the economists said in a research note released on Monday.
“Over the past two years, we have seen some previously closed shipyards in China reopen and start picking up orders again,” the analysis said. “The largest fraction of the fleet eligible for replacement consists of bulk carriers, which are predominantly built by Chinese shipyards.
“This could drive a stronger need for investment expansion in China.”
London and Shanghai-based industrial consultancy Hartland Shipping Services has also predicted sustained growth for the entire sector, with the prospects particularly bright for Chinese shipyards.
In October, market demand for new-build container ships reached its highest level since the second quarter of 2021, the peak of the last wave of global shipbuilding, the company said in a report published that month.