For the first time in nearly two decades Japanese shipbuilders have overtaken rivals in South Korea in terms of newbuild order backlog, industry data shows.
According to Clarskon Research data released Wednesday, in December 2016 Japan had a backlog of 20.64 million compensated gross tonnes (CGT), surpassing South Korea’s backlog of 19.91 CGT.
China is still world’s largest shipbuilding nation with roughly 30 million CGT.
Compared to the same time the previous year, South Korea’s had 31.08 CGT, compared to Japan’s 25.55 million CGT.
The Korea Times reports that 2016 marks the first time in 17 years Korean shipbuilders have fewer ships to build than Japan.
“This shocking overturn shows how dire the situation has become for Korean shipbuilders over the past few years,” an official at one of Korea’s three largest shipbuilders, told The Korea Times. “For the past two decades, Korea ruled the global shipbuilding industry. But now it is behind China and Japan in orders secured. Local shipbuilders must double their efforts to win new contracts in 2017.”
South Korean shipbuilders have been hit hard over the past two years by the prolonged downturn in the shipping and offshore industries. Since the downturn, began the country’s three biggest shipbuilders, Hyundai Heavy, Daewoo Shipbuilding and Samsung Heavy, have been forced to lay off more than 20,000 workers and post substantial losses amid delivery delays and a low number of orders for newbuild vessels and offshore rigs.
CGT is an indicator that best determines the shipbuilding production capacity of a country.