Korea ranks first in orders for LNG-methanol fueled ships
Prediction of high growth in carbon reduction trend
China launches a supply offensive at a lower than expected amount
Responding with Korea’s ‘selective orders’ with advanced technology
According to Tradewinds, a shipping magazine, on the 14th, Maersk, the global second-largest shipping company in terms of fleet capacity, recently signed a contract with Yangtze Zhang Shipbuilding, a Chinese shipbuilder, for an 8,000 TEU (1 TEU is one 20-foot container) for $1.4 billion (approximately 1.9 trillion won). Signed a contract to build 8 methanol ships. It is known that Yangtze Jang Shipbuilding offered a price more than 100 billion won lower than the down payment (ship price) that domestic shipbuilders initially expected.
In the ‘eco-friendly ship’ market, which has been dominated by Korean shipbuilders, Chinese shipbuilders’ checks are intensifying. The International Maritime Organization (IMO) is expected to strengthen the existing carbon emission reduction target at the Marine Environment Protection Commission (MEPC) in July, and while the eco-friendly ship market is expected to grow rapidly, Chinese shipbuilders are using ‘price competitiveness’ as a weapon to win orders. It appears to be actively involved.
Eco-friendly ships refer to ships that operate using eco-friendly fuels such as liquefied natural gas (LNG), liquefied petroleum gas (LPG), and methanol. Korea is at the forefront of the eco-friendly ship market. According to the Ministry of Trade, Industry and Energy, Korea received orders for 13.12 million CGT, or 50% of the 26.06 million CGT (standard cargo carrier converted tonnage) orders for eco-friendly ships worldwide last year, maintaining its lead in the world. HD Korea Shipbuilding & Marine Engineering, an intermediate shipbuilding holding company of HD Hyundai, has recently won orders for eight gas ships worth 2.423 trillion won from shipping companies in Oceania and Asia. Of the total ships (76 ships) that HD Korea Shipbuilding & Marine Engineering received orders by May 11 this year, the proportion of ‘eco-friendly ships’ using fuel other than bunker C oil reached 62% (47 ships).
China is trying to secure competitiveness by launching a ‘supply offensive’ with low prices as a weapon in the eco-friendly ship order market, which has been led by Korea so far. In particular, high growth is expected in the next generation of eco-friendly ships, such as methanol-powered ships that can significantly reduce pollutant emissions, and the pursuit is in full swing. Compared to bunker C oil, methanol can significantly reduce the emission of pollutants such as sulfur oxides (99%), nitrogen oxides (80%), and greenhouse gases (25%), so it is considered an eco-friendly ship fuel that will follow LNG along with ammonia and hydrogen. The US classification ABS predicted that methanol-powered vessels would show an average annual growth rate of 171% from the first order this year to the completion of delivery in 2028.
Prior to this contract with Yangtze Jang Shipbuilding, China’s Dalian Shipbuilding received an order for a methanol propulsion ship. In August of last year, it won an order for six 15,000 TEU class methanol propulsion ships worth $1 billion from CMA CGM, a French shipping company. It is said that even at the time, Korean shipbuilders offered a price that was more than 100 billion won lower than the expected amount.
Despite such pursuit by Chinese shipbuilders, Korean shipbuilders are planning to start ‘selective orders’, giving priority to good contracts rather than quantitative growth. As the backlog of orders has already exceeded three years and ship prices are also rising, the company plans to focus on strengthening internal stability rather than quantitative growth. An industry insider said, “As methanol orders from global shipping companies such as MSC and Maersk have increased, the eco-friendly ship market has entered a period of quantitative and qualitative expansion.”
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.