Shipbuilding remains a cause for concern depending on what part of the globe you are in. For the shipyards and steel economies of the Far East it is an important time, despite ‘local’ disputes and even in Europe there are very strong pockets of shipbuilding concentrating on particular market segments. In an industry where size has become important at both ends, there is continuing conflict surrounding the industry.
South Korea and Japan are at loggerheads over shipbuilding: with South Korean shipbuilders now top of the list for new orders in 2018, particularly with their skill in building LNG carriers, the Japanese – with some suggested support from the EU – are unhappy with South Korean policies in the industry. They claim that government aid for struggling domestic shipbuilder Daewoo Shipbuilding & Marine Engineering, is unfairly reshaping the global shipbuilding market and this could prolong the current glut of vessels which is damaging to the sector. But the real danger in that part of the globe is from the Chinese who can offer lower production and vessel costs.
Japan has seen previous bouts of over-capacity which resulted in government interventions and the realisation now is that for a country’s industry to survive, the weaker players in the sector may need to be cut adrift. Experts believe this course of action would have strengthened the shipbuilding industry offering Japanese builders an edge in fighting off the threats from South Korean and Chinese shipbuilders. With their skills and reputation, not to mention costs, South Korean shipyards have now won the majority of orders for LNG vessels for the next few years with an estimated worth of around $9billion.
In Europe the emphasis is mixed with cruise and passenger ship in demand at German yards while Dutch, German and French shipyards are concentrating on specialist vessels in the cruise, ferry, small work boats, naval vessels and luxury yachts. Europe is still highly regarded in these sectors and a new wave of consolidation is offering greater opportunities for smaller shipyards looking to enter and consolidate positions in the expedition-type vessels and smaller cruise ships. The Dutch and Germans continue their tradition of building cruise, river and luxury yachts but the Turks and Italians are also heavily involved in these sectors. The shipbuilding industry has shaped itself around world geography. Now all we need is for calmer waters to offer more opportunities to rebuild this important maritime sector.