| Chinese shipbuilders' market share weakens |
| Although Chinese shipbuilders have been winning fewer orders since the start of the year, this would not mean more business for South Korean shipbuilders, said an analyst. Samsung Securities analyst Han Young-soo said that China's market share in the global shipbuilding market fell from 42% in 2013 to 39% in 2014 and to 21% in the first two months of 2015. Han put this down to the inferior fuel efficiency of Chinese-built ships and the poor dry bulk freight market, as Chinese shipbuilders have been building the majority of bulk carriers. However, Chinese builders have really been losing customers to Japanese shipbuilders, which traditionally also specialise in bulk carriers. The weakening yen and aggressive marketing by Japanese shipbuilders have enabled them to regain some market share, noted Han. In addition, state-backed Chinese shipbuilders have stayed resilient even as some privately owned shipbuilders are struggling. Han said, "Large Chinese players with the potential to rival Korea's listed shipbuilders have stayed competitive, with the order backlog of the former's top-seven groups up a respective 49% and 11% in 2013 and 2014 – whereas China's overall order backlog grew 26% in 2013 before slipping 1% last year – indicating that recent new order and order backlog declines owe to restructuring by smaller firms. For reference, Hudong Zhonghua, Shanghai Waigaoqiao, and Dalian are preparing bids for 20,000 teu container ships, the segment in which Korea dominates. Recent share-price weakness of Korean shipbuilders owes to the absence of offshore orders amid oil price declines, and not to contraction of their commercial vessel market share." |