Quote

Blog

Global trade contraction... Only the shipbuilding industry is thriving

26 Feb 2024

By Jennifer Chang    Photo:by Markus Kammermann from Pixabay

China is one of the world's largest manufacturing nations, achieving significant economic success by positioning itself as the "world's factory." Today, China is actively expanding its influence, and one notable strategic initiative is its ambition to become a global maritime power.

 

Despite concerns about escalating geopolitical tensions and their impact on global trade, the shipbuilding industry continues to experience growth. According to reports, production plans for most Chinese shipyards are scheduled through 2026. Since the early 2000s, China has witnessed a significant increase in shipbuilding output, holding approximately a 10% market share globally at that time.

Last year, Chinese shipyards secured over 65% of all new orders, underscoring the robust performance of the Chinese shipbuilding industry. This strong showing reflects China's increasing competitiveness and position in the global shipbuilding market. Overall, China, South Korea, and Japan together account for over 90% of the world's new merchant ship construction.

 

The geopolitical tensions surrounding major trade routes like the Black Sea and the Red Sea may continue to pose challenges, leading to the potential elongation of shipping routes as companies seek to navigate away from conflict zones. Additionally, the low water levels in the Panama Canal also pose a threat to future transportation.

 

These circumstances drive growth in the shipbuilding industry, as longer voyages necessitate more vessels to transport the same amount of cargo. Based on current trends, it is anticipated that the shipbuilding market will experience significant growth by 2030. This growth will be propelled by various factors, including an increase in maritime trade volume and the demand for more environmentally friendly vessels as the industry moves towards decarbonization. Simultaneously, with global attention focused on climate change, the shipping industry is actively seeking eco-friendly technologies and solutions.

 

The call for greener ships will drive innovation and upgrades in ship design and construction. This will prompt shipyards to develop more energy-efficient, emission-reducing, and environmentally friendly ship designs, incorporating technologies such as alternative fuels and carbon emission reduction.

 

Asia has consistently held a dominant position in the global shipbuilding industry, with countries such as China, Japan, and South Korea possessing substantial production capacity and excellent technological capabilities in shipbuilding.

 

The shipbuilding sector in Asia is poised to continue benefiting from these strengths, maintaining its leading position in the global shipbuilding market.
 

Appreciate if you could share TGL Blog among your friends who are interested in first-hand market information of supply chain and updated economic incidents.

Get a Quote Go Top