Build orders for South Korea’s rebounding shipbuilding industry are likely to reach the second highest in the world this year, following China, according to data by British shipbuilding and marine analysis agency Clarkson Research Services on Friday.

The research data shows that China‘s cumulative order volume for the January to November period reached 7.13 million CGT or 324 vessels, followed by Korea with 5.74 million CGT and Japan at 1.82 million CGT. CGT refers to the Compensated Gross Tonnage, which is an indicator of the amount of work that is necessary to build a given ship according size and type.

According to industry experts, it is anticipated that China will retain its No. 1 position for annual cumulative order intakes for the seventh consecutive year since becoming the world’s biggest shipbuilders in 2011, while Korea is expected to finish out the rest of the year at the No. 2 spot. 

By country, China had the largest monthly order by volume with 910,000 CGT or 47 vessels, followed by Italy with 310,000 CGT, Korea with 80,000 and Japan with 50,000 CGT.

While China’s shipbuilding global market share has reached 36.6 percent, Korea’s share dropped 7 percent to 29.4 percent.

During a meeting with economic ministers on Friday morning, Korea’s Finance Minister Kim Dong-yeon announced that the Seoul government is drawing up a blueprint for speeding-up the recovery and restructuring process for the local shipping industry by early next year.

Over the past several years, Korea’s shipbuilding sectors have been hit with massive fiscal blows following slumps in global orders. Most of the local companies have initiated self-rescue measures, which include budget cuts and lay-offs in order to avoid declaring bankruptcy.

“Keeping the ecosystem in consideration, we will set up a direction for promoting innovated growth of shipbuilding industry by early next year,” said Kim. “We will also discuss ways to deal with issues among mid-sized shipping companies via external consulting.“

Although the global shipbuilding market has been gradually showing signs of fiscal recovery this year, as is the case with Korea’s biggest shipbuilders, build orders for the country’s mid-sized shipbuilding companies remain sparse.

According to data by the Korea Export-Import Bank of Korea earlier this year, ship orders for medium-sized shipyards in Korea were estimated to be around $110 million in the first quarter. Despite being an improvement compared to last year’s first quarter, when there was not a single order, orders for Korea’s eight mid-sized shipbuilders are falling far behind top builders such as Hyundai and Daewoo.

In 2007, when the local shipbuilding industry was at its peak, mid-sized shipbuilders secured projects worth $26.22 billion and accounted for roughly 26.7 percent of the country’s total shipbuilding orders.

As for Korea’s largest shipyards, this year has shown signs of financial rebound.

Earlier this week, Hyundai Heavy Industries announced that it had clinched a deal to build two large crude carriers, in a deal with an estimated worth of $166 million. The company also revealed it is close to wrapping up a separate deal to build two crude carriers for Greece’s Kyklades Maritime Corp. The deal, expected to be signed-off later this month, is estimated to be worth $163 million.

On Thursday, Daewoo Shipbuilding & Marine Engineering said it also won a $394 million deal to build a vessel and an offshore facility for Greece’s Maran Gas Maritime. The shipyard added that it additionally clinched another order for a crude carrier for Aeolos, another Greece shipping company, in a contract worth $82 million. 

By Julie Jackson  (juliejackson@heraldcorp.com)