A Bigger Share of the Pie
As illustrated by the Graph of the Month, shares of global output have varied greatly in the last decade. Chinese builders increased their share of global deliveries in CGT from 14.3% in 2005 to 41.3% in 2012. During this period output increased from 3.9m CGT to a record 19.9m CGT. Korean yards also increased their output from 9.5m CGT to 16.1m CGT between 2005 and 2012 but the less dramatic ramp up in output saw their market share gradually decline. Conversely Japanese yards maintained a steady level of output, averaging 9.2m CGT per annum and as a result their share of global output declined considerably compared to their Korean coun-terparts. The European shipbuilding industry underwent the biggest decline as it struggled to contend with the more competitive markets in Asia.

Flavour of the Day
The pie-chart on the left shows the global orderbook (which can be used as a guide to future delivery trends). The orderbook has changed considerably since the Lehman Brothers collapse in 2008. Firstly it is 60% smaller following a period of reduced contracting and record level of output. Although a revival in bulk ordering in 2010 bolstered the Chinese orderbook to 40% of the global total at start 2011, the product mix of contracts has since changed. Interest has shifted from the volume sectors to more specialised tonnage. Korean yards have been in a position to take advantage of this shift to more complex vessel types due to their technical expertise and since 2011 have taken 37.8% of contracts in CGT, compared to Chinese yards who have taken 33.6%. This explains both the reduction in Chinese orderbook share and indeed the pie-chart to the right, where Korean yards have the largest volume of tonnage scheduled for delivery in 2014.

Aligning Expectations?
The graph shows projected delivery shares in 2013 and 2014, based on forecast delivery of the current orderbook (not allowing for future contracting). Projections suggest that the Chinese delivery share is likely to decline for the first time on record in 2013. Primarily this is due to the comparatively larger volume of more complex vessel types contracted at Korean yards, who are projected to gain market share. However, who will take the top spot is a difficult issue. Despite the schedule suggesting that Korean yards may take pole position by 2014, it is projected that the larger Chinese orderbook (which has 70% more tonnage scheduled for delivery in 2013 than Korea) is likely to suffer significant slippage. How the shares develop in practice will continue to need analysis.
So, the share of global output between the top building regions has changed considerably. It is currently projected that Chinese yards will lose market share, and their output levels will become closely aligned with Korean yards. However, a close eye will have to be kept on the precise extent of the shifts and which country actually holds the leading position.