Rapidly Increasing International Seaborne Trade to Fuel Growth of Shipbuilding Market
Maritime transport, which supports supply chains and facilitates international trade, is the backbone of globalisation and industrialisation. This is driving the global shipbuilding market. The demand for bulk materials like crude oil, steel, and ore, as well as completed products like vehicles, has increased significantly in the previous decade, especially from developing countries. Around 80% of global trade is transported by sea or other waterways and handled by seaports around the world.
Furthermore, a steady increase in international seaborne trade or marine transport is predicted to increase demand for tankers, cargo ships, and bulk carriers, bolstering the shipbuilding industry's prospects. For instance, in terms of both exports and imports, developing economies continued to account for the biggest proportion of global seaborne commerce in 2020. The seaborne commerce accounted around 59.5 percent of the world's total commerce. Asia's supremacy as a major marine freight region continues unabated. In 2020, Asian ports, both developed and developing, loaded over 4.4 billion tonnes of cargo, accounting for more than 41.3 percent of all commodities loaded in ports worldwide. In 2020, Asian ports received around 7.0 billion tonnes or 65.5 percent of total cargo released worldwide.
The demand for efficient and cost-effective transportation alternatives for the movement of commodities is driving the development of environmentally friendly and innovative ships. Shipping huge volumes by sea are less expensive than shipping large volumes by road, rail, or air. The need for shipbuilding is likely to increase because of this scenario. The growth of the shipbuilding sector is expected to be aided by increased seaborne trade. Consumer demand is expanding due to increasing population, rising purchasing power, and rising living standards, resulting in high output and rapid industrialisation. The need for shipbuilding is likely to increase as a consequence.
Rise in Globalisation, and Flourishing Global Trade Bode Well for Commercial Transportation, Pushing Market Growth
The shipping business is structured around two key sectors: shipbuilding, and maritime transportation. Despite their vast disparities, both industries are intertwined, with a strong and direct reliance on the success of global shipbuilding market. During the projection period, the transportation segment is expected to hold the biggest market share. The market is predicted to grow due to the advent of globalisation and thriving worldwide trade. In the predicted years, commercial ships will be the main shareholders. Passengers, and cargo are transported on commercial ships. The shipbuilding market is being accelerated by an increase in Foreign Direct Investments (FDI) in the sector, expanding population in emerging nations, and an increasing number of passenger cruises.
Strong Forward and Backward Linkage Industries to Drive Growth of Shipbuilding Market in Asia Pacific
In 2021, Asia Pacific held the greatest revenue share in shipbuilding market. This is due to the presence of key manufacturing powerhouses such as China, Japan, and South Korea in the region. These businesses rely largely on external trade, which is primarily carried out by ships. This in turn drives the demand for ships on the market. In 2021, China received over half of all Shipbuilding orders, cementing its position as a global shipbuilding powerhouse. Southeast Asia is equally concentrated in ship destruction, with Bangladesh, India, and Pakistan accounting for about 90% of global ship scrapping activities.
China overtook South Korea in terms of annual order volume by Compensated Gross Tonne (CGT) in 2021. Chinese shipbuilders got orders totalling over 22.8 million CGT throughout the year, accounting for roughly half of the global total of 45.7 million CGT. Builders in South Korea got orders worth 17.5 million CGT, or around 38% of the total volume. China dominated new container ship acquisitions; an industry that has grown as consumer goods traffic has increased. South Korea is another significant actor in the Asia Pacific area. South Korea's big three shipbuilders focused on high-margin, high-value LNG carriers in 2021 because they are more profitable. With 37 contracts, Korean shipyards rank as the top players in the LNG carrier market, with 16 for Qatar Energy's mega-order and another 15 for Petronas. According to KBS World, South Korean shipbuilders were choosier in the year 2021, preferring high-value-added projects over the total volume, resulting in decreased order numbers.
During the projection period, Europe is expected to hold a sizable share in shipbuilding market. In the construction of sophisticated boats such as ferries, cruise ships, dredgers, and superyachts, the European shipbuilding sector leads the market. The shipbuilding market makes a significant contribution to national security, and regional industrial infrastructure. These are a few of the primary variables that are propelling the industry in this area forward. During the projected period, the shipbuilding market in North America is expected to grow significantly. The United States Navy's high public financing for defence vessels, as well as growing demand for energy vessels and other private vessels, are likely to propel the industry forward.
Global Shipbuilding Market: Competitive Landscape
Companies in the market are introducing new products alongside initiation collaborations, alliances, and partnership agreements. For instance, in February 2022, Daewoo Shipbuilding & Marine Engineering Co. announced that it had received orders from Europe totalling KRW 1.8 trillion (USD 1.5 billion). Daewoo Shipbuilding will construct two liquefied natural gas carriers for Maran Gas Maritime Inc., a subsidiary of Greece's largest shipping company, Angelicoussis Shipping Group, as well as six container ships for an unnamed European shipper. On the other hand, in December 2021, the China State Shipbuilding Corporation (CSSC) announced a substantial order for vessel newbuilding and equipment worth USD 1.9 billion. Eight vessel construction contracts and eight maritime equipment project contracts are included in the orders.
Few of the players in the shipbuilding market include Bae Systems Plc, Fincantieri Group, General Dynamics Corporation, Huntington Ingalls Industries, Inc., Sumitomo Heavy Industries, Ltd, Korea Shipbuilding & Offshore Engineering Co., Ltd., Hyundai Heavy Industries Co., Ltd., Mitsubishi Heavy Industries, Ltd., Oshima Shipbuilding Co., Ltd., Damen Shipyards Group, and Samsung Heavy Industries Co., Ltd.
Global Shipbuilding Market is Segmented as Below:
Key Elements Included In The Study: Global Shipbuilding Market
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