Shipbuilding: It is not even a contest
There are currently 80 US-flagged vessels in international commerce compared with China’s 5,500. The recently introduced SHIPS for America Act would revitalize the US shipbuilding and commercial maritime industries after decades of neglect, according to its sponsors, Democratic Senator Mark Kelly, Republican Senator Todd Young, Democratic Representative John Garamendi and Republican Representative Trent Kelly. And while his name might not be on it, Mike Waltz’s fingerprints are all over it. Waltz, a China hawk, was deeply involved in putting the bill together before he was tapped to be Trump’s national security adviser. “It’s one thing for the United States to have declined but to have the void filled by our greatest adversary and, I think, the greatest adversary the United States has ever faced is incredibly serious and concerning,” Waltz said at a CSIS event in September.
“Last year, 2023, China received over 1,500 new orders for new ships. The United States received five. The largest shipyard in China could fit every shipyard in the United States inside it and is producing more ships and then, you know, by – comparably the largest shipyard in South Korea, Hyundai, is producing 40 to 50 ships a year. Again, the United States produced five.”
Source1: Bloomberg
Source 2: CSIS
Betting on trade: 2024 saw a huge boom in ship-building orders
The biggest vessel-ordering program since the eve of the global financial crisis is putting a squeeze on the shipbuilding industry’s capacity to construct new vessels. Owners plowed more than $188 billion into newbuilds in the first 11 months of 2024, on course for the strongest pace in terms of both value and capacity since 2007, according to Clarkson Research Services Ltd, a unit of the world’s largest shipbroker. Two of the world’s three largest shipbuilders say customers would need to wait until 2028 to receive new ships ordered today. … The trouble is that some vessels, particularly ships that move coal, ore and crops, aren’t lucrative enough for yards to make. Instead, they’re are increasingly full with container ships, where diversions around Africa have helped create meteoric profits for the world’s major lines, and gas carriers, whose demand is set to surge over the coming years as seaborne flows rise. … HD Hyundai Heavy Industries Co., the second-biggest, has taken $20.5 billion of orders for 181 vessels so far this year, exceeding its own annual target by 52%, a spokesperson said. It will take about three-and-a-half years to clear its backlog, the firm said. More than a quarter of those are for LPG and ammonia carriers, and the company is seeking value-added products like gas ships or green-energy vessels rather than bulk carriers or oil tankers that generate lower margins.
Source: Bloomberg