Chinese shipyards are sweeping the market for environmentally-friendly, low-carbon methanol-powered ships while the South Korean shipbuilding industry focuses on selective orders for high-value vessels.

According to Clarkson Research, a UK-based shipbuilding and maritime analysis institute, on Sunday, Chinese shipyards secured orders for a total of 18 methanol-powered ships in January.

Container ships dominated the order book with 14 vessels, showcasing China’s dominance in this segment.

In contrast, Korean shipbuilders have not received any orders for methanol-powered ships since July last year.

The low order performance of Korean shipbuilders in this segment can be attributed to the country’s major players focusing on selective orders for smaller vessels within the high-value ship category.

For the three majors in Korea, accumulating a 3-to-4-year backlog of orders, efficiently utilizing their docks is a priority.

The prospect of securing orders for large methanol-powered container ships, which occupy significant dock space, presents a challenging situation.

Additionally, the tendency of shipowners to place orders for 6-8 container ships simultaneously to lower unit costs has impacted the situation.

However, experts say that China’s gap with Korean rivals may narrow as China accumulates experience in building methanol-powered ships.

Some predict that as China absorbs the methanol-powered ship market, the competitive edge of Korean shipyards may diminish.

China’s advantage, in particular, lies in its ability to leverage domestic methanol production and supply capabilities before securing orders, unlike Korea, which relies on importing methanol.

“Compared to five years ago, Chinese shipyards have significantly improved their capacity to satisfy shipowners with methanol-powered ships,” said Professor Kim Yong-hwan from the Department of Naval Architecture and Ocean Engineering at Seoul National University. “If China continues to secure orders, there is a valid concern that they might surpass Korea in this segment.”

By Choi Hyun-jae and Minu Kim

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