The outlook for FPSO and wind power engineering vessels continues to improve

Market pattern: China and South Korea occupy most of the market share, and China is expected to continue to break through to the high-end

Competitive landscape: China's market share is the first in the world, and South Korea occupies more of the high value-added ship market

The global shipbuilding industry is dominated by China and South Korea, with a combined market share of 87% in 2022. The world's new ship orders in 2021-2022 will be 53.295 million and 42.779 million CGT respectively, and the value of new ship orders will be $117.26 billion and $124.26 billion, respectively. China has become the global shipbuilding center. Since the 1990s, with the rise of China's economy and the rapid development of manufacturing industry, China's shipbuilding industry has risen rapidly. In terms of CGT, China's global market share of new ship orders has gradually increased from less than 10% in the 1990s to 49% in 2022, which is the same as in 2021. South Korea's market share has been stable at about 30% since 2000, and its market share in 2022 will reach 38%, an increase of 4 percentage points from 2021. The overall market share of Europe and Japan is gradually shrinking, with a market share of 3% and 8% respectively in 2022.

South Korean ship companies occupy more market share of high value-added ships, and Chinese ship companies' product structure is constantly high-end. Among the new orders received in 2022, Chinese shipbuilders are mainly container ships, bulk carriers and LNG carriers, accounting for 30.9%, 16.5% and 22.7% respectively in terms of CGT. South Korean companies are dominated by container ships and LNG carriers, accounting for 27.3% and 65.6% respectively in terms of CGT. According to Clarksons data, the global new ship market in 2022 orders for high value-added vessels such as large liquefied natural gas (LNG) carriers, large container ships and very large oil carriers (VLCCS) reached 270 units with 20.79 million revised gross tons. In the field of large LNG carriers, South Korean ship companies to undertake large LNG carrier orders reached 10.12 million revised gross tons, accounting for nearly 70% of the world's large LNG carrier new ship orders, Chinese ship companies also made a historic breakthrough, winning about 30% of the market share; In the field of large container ships, Chinese and South Korean companies are evenly divided; In the very large tanker (VLCC) field, orders are mainly occupied by Chinese shipping companies.

The global shipbuilding industry market is highly concentrated, and the market share of the five major shipyards will reach 63% by 2022. According to Clarksons data, by the end of 2022, the world's top five shipyards with orders in hand are CSSC, Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding and CIMC Group, with orders in hand of 19.3 million, 17.86 million, 10.19 million, 8.48 million and 5.05 million CGT, respectively. The market share is 18%, 17%, 9%, 8%, 5%, a total of 57%, in 2022, CSSC, Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding, CIMC five shipyards new ship orders are 9.01 million, 8.08 million, 3.83 million, 3.64 million, 2.15 million CGT, respectively. The market share is 21%, 19%, 9%, 9%, 5%, a total of 63%.

Advantages and disadvantages of China's shipbuilding competition: obvious advantages of labor and raw materials, ship supporting is still lacking

According to the data of the European Shipbuilding Association, from the perspective of cost structure, the value of the ship includes three parts: Marine equipment, raw materials and materials, and ship manufacturing assembly, accounting for 43%, 27%, and 30% respectively. These three components correspond to three key competitive factors: 1) skilled and cheap labor; 2) Stable and cheap raw materials; 3) Punctual delivery of key equipment.

The advantages of China's shipbuilding industry are first reflected in the cost of human resources. According to the South Korean Financial Supervisory Service (FSS) data, in 2021, the average annual salary of the three major shipyards in South Korea, Samsung Heavy Industries, Daewoo Shipbuilding, and Hyundai Heavy Industries shipbuilding employees is 423,000, 378,000, and 359,000 yuan respectively (according to the average exchange rate of 1 yuan to 177.4 won in 2021). According to our industry research, in 2021, the average salary of employees of China Shipbuilding and CIMC Shipbuilding, the two largest shipyards in China, will be about 100,000 yuan. Shipbuilding industry needs a large number of skilled workers engaged in welding, painting and other working environment is relatively harsh work, labor costs account for about 30% of ship manufacturing costs, compared with Japan, South Korea and other developed countries, young and middle-aged labor supply is relatively sufficient, education level is also constantly improving. Considering that the global shipbuilding industry, even in good times, has an average gross profit margin of only 10% and a net profit margin of about 5%, labor costs are undoubtedly an important influencing factor.