Whilst delivery volumes from Korean yards have fallen since the peak of the delivery boom, the product mix delivered from Korean yards has continued to evolve. November’s Shipbuilding Focus takes a closer look at delivery activity at Korean yards.
An Upward Trajectory
Historically, deliveries from Korean yards have generally been more focused on relatively specialised vessel types compared to those made from their Chinese and Japanese counterparts. In terms of CGT, which is a useful measure of output that takes into account a ship’s complexity of build, Korean yards have delivered 34% of global output in the ytd, higher than their share of dwt (27%). As the Graph of the Month shows, the average CGT of a ship delivered from Korean yards has consistently been higher than that from Chinese or Japanese yards. This difference has increased substantially in recent years and the average CGT of a ship delivered from Korean yards in the ytd has been 38,127 CGT – up 30% since 2012 and over twice as large as that from Chinese and Japanese builders.
Keeping On The Gas
The recent uptick in the average CGT of a ship delivered by Korean yards has been driven by strong delivery activity in the gas carrier and 8,000+ TEU boxship (VLCS) sectors. In the gas sector, the average CGT of a ship delivered from Korean yards has increased almost 300% since 2012 to 63,000 CGT in 2014 so far. This is due to the fact that more LNG carriers, which are substantially larger than LPG carriers in CGT terms, have been delivered in the ytd relative to LPG carriers (24 versus 13 respectively), as well as upsizing across the LPG carriers that have been delivered. In the boxship sector, there has been a firm level of delivery activity at the largest end (13,000+ TEU) in the ytd and VLCSs account for 90% of boxship deliveries in numerical terms. This upsizing has helped push the average CGT of a Korean boxship delivery up 28% y-o-y, increasing from around 42,000 CGT in 2013 to over 54,000 CGT in the ytd.
Top End Tonnage
As has been well covered previously, Korean deliveries are consolidated amongst a few mega yards. In 2014 so far, the top five Korean yards account for over 80% of Korean deliveries in CGT terms. Daewoo and Hyundai H.I. together account for almost 50% of VLCS tonnage reported delivered globally in the ytd. This includes Daewoo’s delivery of eight 18,270 TEU VLCSs – currently the largest boxships in the fleet. Meanwhile, South Korean shipyards account for just over 50% of gas carrier tonnage reported delivered in CGT terms in the ytd and they have output almost all of the LNG tonnage delivered (96%). Samsung H.I. output the largest share of this, accounting for almost 40% of LNG tonnage delivered globally in CGT terms in 2014 so far.
Evidently, the average CGT of a ship delivered from Korean yards has increased substantially since 2012. This has primarily been driven by changes in the product mix delivered as well as upsizing trends. The average CGT of a ship reported delivered from Korean yards is now over double that from Chinese or Japanese yards as Korean yards continue to focus on the delivery of relatively more complex, higher CGT vessel types.