‘China threatens Korea’s shipbuilding supremacy’

China overtook Korea last year to become the world’s largest shipbuilder by exports, a trade research institute estimated Thursday.

By every assessment, Korea has been the undisputed kingpin in the global shipbuilding industry for years, thanks largely as its home to the world’s three largest shipbuilders.

But the leadership was shaken last year by the prolonged economic slowdown, particularly in European countries that are major buyers of Korean vessels, according to the Institute for International Trade (IIT).

Nearly 30 percent of vessels built here for export are delivered to European buyers, while the ratio is less than 15 percent for China and below 13 percent for Japan, said the institute.

The IIT raised the possibility of China becoming the world’s largest ship exporter last year by comparing the two countries’ ship records from January to October.

Korea’s ship exports during the period stood at $33.5 billion, down 23.2 percent compared with the same period in 2011, while China posted $33.6 billion, according to the institute. Although performances from the last two months were not reflected, the IIT said it’s unlikely that Korea maintained its long-running lead.

The institute said Korea is still the world’s largest shipbuilder in terms of orders received. But the gap with runner-up China continues to narrow.

The number of orders Korea received from January to September represented 36.3 percent of those placed globally during that period, while China took 34.7 percent. The gap in 2011 was 9 percentage points.

“Korea’s decline in the global shipbuilding industry last year was predictable,” said IIT researcher Cho Sang-hyun. “Vessels built upon contracts at the height of the global financial crisis in 2008 started to be delivered from last year. Back then, prices of vessels were relatively low due to declining global demand.”

Cho said Korea will be reinstated as the world’s largest ship exporter this year, citing statistics that show rebounding global demand for new vessels.

“Various indicators suggest a slow demand recovery this year,” Cho said. “Korean shipbuilders are expected to see an increase of exports by 4 percent.”

Meanwhile, the world largest shipbuilder, Hyundai Heavy Industries, said it is targeting $29.7 billion worth of orders this year, up 52.3 percent from last year. Last year, Hyundai won $19.49 billion worth of orders, dropping 23 percent year-on-year, due to the global economic downturn.

Hyundai said it will begin to aggressively seek expansion in market share and reduce costs in order to tide over the prolonged economic slump.

Two other major shipbuilders headquartered in Korea ㅡ Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering ㅡ have yet to announce their goals for this year but are widely expected to launch aggressive marketing activities to make up for massive losses in 2012. <The Korea Times/Park Si-soo>