The two major mergers of South Korean and Chinese shipyards are expected to control nearly half of the global shipbuilding market, forging a new reality for the global shipping industry.
The announcement of the forthcoming merger between the two most major South Korean shipbuilders, Hyundai Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co., made headlines in 2019.
Earlier this month, the announcement of a planned merger between the two major Chinese shipbuilders, China Shipbuilding Industry Corp. and China State Shipbuilding Corp., came as the latest in a row of mergers of state-owned businesses in the country.
These developments are expected to create two behemoths that will control around 46% of the global market among the world’s top 10 yards, according data provided by VesselsValue Ltd.
This comes in continuation of a year-long downturn in global shipbuilding, as a result of a global slowdown in maritime trade.
The last decade has seen both groups under intense pressure to improve performance. Now they are expected to compete directly for ships such as LNG carriers, which command prices twice as high as other vessels and bring heftier profit margins, the Wall Street Journal reported.
This leaves other smaller players both locally and in other countries like Japan struggling to compete, which is likely to lead to higher ship prices.
