Chinese shipbuilders logged higher margins in the second quarter of this year than their South Korean rivals, as they built higher-priced ships ordered before the 2009 financial crisis, a report said Thursday.
Daishin Securities Co. estimated in the report that the operating income margins for Chinese shipbuilders ranged from 1.4 percent to 28.5 percent during the April-June period, while South Korean shipbuilders saw their margins for the same period stay in a 2.1-10.4 percent range.
Yangzijiang Shipbuilding Ltd., based in China's eastern coastal province of Jiangsu, recorded the highest operating margin of 28.5 percent, as 70 percent of its orders were won before the end of 2009, it said.
In South Korea, Hyundai Heavy Industries Co. was the most profitable with a 10.4 percent margin, followed by Samsung Heavy Industries Co. with 9.1 percent.
The trend is expected to continue through this year but South Korean shipbuilders are forecast to overtake their Chinese rivals in terms of operating income margin starting in 2013, when South Korean shipyards are expected to clinch orders for high-margin, high-tech ships such as liquefied natural gas (LNG) carriers, floating and production, storage and offloading (FPSO) vessels.
In the first half of this year, South Korea's shipbuilders led the global market in the number of new orders, despite a large drop in shipbuilding orders caused by sluggish economic conditions.
South Korea won orders for 3.31 million compensated gross tons (CGTs) during the cited period. The figure represents less than half of the 8.92 million CGTs the country acquired during the same period last year, but accounts for a large share of total orders placed globally, capturing 37.7 percent during the cited period.
China came second, with its global market share rising slightly from 32.1 percent in 2011 to 34.5 percent in the first half.
However, the gap between South Korea and China widened significantly when measured in the value of their orders, as South Korean shipyards won deals valued at US$14 billion while Chinese rivals' orders, totaling 3.03 million CGTs, are worth only $5.9 billion, according to the South Korean Ministry of Knowledge Economy earlier.