Japan’s push to stage shipbuilding comeback may have Korea checking its stern
Korean shipbuilders may sofon face a second competitor in the LNG carrier market they lead. A major Japanese shipbuilder is considering a large new dock capable of building liquefied natural gas (LNG) carriers as Tokyo pushes to revive an industry Japan dominated until the 1990s. Namura Shipbuilding is considering building the dock near its Imari ...
Korea's shipbuilding industry is facing potential competition from a major Japanese player looking to revive the sector. Namura Shipbuilding is mulling the construction of a new dock capable of producing liquefied natural gas (LNG) carriers near its Imari shipyard in Saga Prefecture. The facility could be operational by 2035 and cost up to 100 billion yen ($630 million), including government support. This would mark Japan's first new large shipbuilding dock since 2017.
Japan's push to reestablish its shipbuilding capabilities stems from a desire to bolster its economic security. Prime Minister Sanae Takaichi has labeled shipbuilding an industry vital to both national security and economic activity. The government aims to double shipbuilding capacity from around 9 million gross tons to 18 million gross tons by 2035 and is seeking about 1 trillion yen in public and private investment over the same period.
Japan had historically dominated the global shipbuilding industry through the 1990s before Korea took the top spot in the 2000s, with China quickly following suit. In 2022, China accounted for 75% of global new ship orders by compensated gross tonnage, followed by Korea at 17% and Japan at just 2%.
While Korean shipbuilders still lead LNG carrier orders, they face growing competition from China. Korean yards won 65.5% of the 55 LNG carriers ordered worldwide in the first half of 2023, compared to China's 34.5%. Japanese yards have struggled to catch up, having not built a membrane-type LNG carrier since 2018 and losing skilled workers as the industry contracted after the 1990s.
Japan is grappling with the challenge of technically equipping its yards for the production of membrane-type LNG carriers, a standard used globally today. The industry also lacks recent experience in building these vessels. Some Japanese shipbuilders are considering technical cooperation with Korean companies to facilitate their return to LNG carrier production.
Despite these challenges, there could be opportunities for Korean shipbuilders and marine equipment suppliers if Japan resumes LNG carrier production. Korean firms currently hold an oligopoly in the production of cryogenic insulation, a key component of LNG carriers.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.