Shipbuilding Market

The global Shipbuilding Market is valued at USD 150.5 Billion in 2023 and is projected to reach a value of USD 205 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 3.5% between 2024 and 2032.

Key Highlights of Shipbuilding Market

• In 2023, the Asia Pacific region dominated the Shipbuilding market, accounting for 79.2% of the total market share,
• Europe is projected to remain the fastest-growing region throughout the forecast period,
• In 2023, the Bulk Carriers segment dominated the market, with a market share of around 34.5%,
• Based on End-Use, the Transport segment significantly contributed to the market’s expansion, constituting over 90.1% of the overall revenue share in 2023.

Shipbuilding Market: Regional Overview

• In 2023, the Asia Pacific Shipbuilding market asserted its significant dominance, capturing a commanding 79.2% share of the total revenue, with China and South Korea emerging as the major contributors to this formidable position.
• With China leading the charge, the nation solidified its status as the world's foremost Shipbuilding powerhouse in 2023, achieving unparalleled success across multiple metrics. Notably, China claimed the top spot in terms of output, new Shipbuilding contracts, and orders-on-hand, registering remarkable double digit growth in each category.
• According to data released by China’s Ministry of Industry and Information Technology, the country's Shipbuilding sector witnessed robust expansion in 2023. Output surged by 11.8% year-on-year, reaching 42.32 million dwt, while newbuilding orders skyrocketed by 56.4%, totaling 71.2 million dwt. Orders on hand at the end of December 2023 surged by 32%, reaching 139.39 million dwt.
• China's dominance in 2023 extended globally, with its Shipbuilding output, newly received orders, and orders on hand accounting for significant proportions of the global market share. Notably, China's share in these categories reached 50.2%, 66.6%, and 55%, respectively, marking the first instance of simultaneous double-digit growth across all three indexes. China's leadership position in obtaining new contracts for 14 of the world's 18 main ship types, such as coal carriers, oil tankers, containerships and motor vessels, reinforced its unrivalled influence on the global Shipbuilding scene.

Shipbuilding Market: Type Overview

• The Bulk Carriers segment dominated the Global Shipbuilding market in 2023, with 34.5% of revenue share.
• Bulk carriers, transporting dry commodities like grains, ores, coal, and cement, dominate the global Shipbuilding market due to their versatility across major economies. Their ability to transport goods without specialized packaging has maintained stable dry bulk freight rates.
• For example, Oshima Shipyard in Japan, as of December 2023, commands a 25% share of the country's bulk carrier production. By April 2024, the shipyard has delivered 1,013 vessels, predominantly bulk carriers, employing 1,625 individuals, primarily from Nagasaki Prefecture. This exemplifies the significant dominance of bulk carriers in the Shipbuilding sector, driven by their indispensable role in transporting essential dry goods worldwide.

Key Trends

1. To mitigate the impact on the environment while complying with strict emission regulations, the global Shipbuilding industry is adopting more green technologies. International mandates such as the IMO 2020 Sulfur cap are driving this change. The development of LNG powered ships such as the CMA CGM Jacques Saadé, the world's largest LNG powered container ship, is one of the most notable examples. This vessel not only reduces sulfur emissions but also decreases CO2 emissions significantly compared to traditional oil-powered ships.
2. The integration of digital technologies is transforming the Shipbuilding industry by enhancing operational efficiency and safety. Smart ships equipped with advanced sensors, AI, & IoT systems enable real-time monitoring and predictive maintenance. For e.g., Rolls-Royce's autonomous ship project aims to create vessels that can operate with minimal human intervention, improving navigational safety and reducing operational costs through data-driven decision-making processes.
3. There is an increasing demand for specialized vessels tailored to specific industries & activities, such as offshore wind energy installation and deep-sea mining. These ships require sophisticated designs and technology to perform complex tasks. An example is the Voltaire, a jack-up vessel designed by Jan De Nul, specifically built for installing next-generation offshore wind turbines. Its unique capabilities allow it to handle the larger as well as more powerful turbines essential for the expansion of offshore wind farms.
4. The trend towards larger container ships is driven by the need to enhance economies of scale and reduce per-unit shipping costs. Shipbuilders are designing vessels that can carry more containers while being more fuel-efficient. The MSC Gülsün, the largest container ship in the world, exemplifies this trend. It can carry over 23,756 TEUs (twenty-foot equivalent units) and features advanced hull designs and energy-efficient systems that lower its environmental footprint.
5. Increased investments in the Shipbuilding of warships are stimulated by domestic security concerns and geopolitical tensions. In order to maintain their dominance in the seas, countries are modernizing their fleets with modern warships and submarines. For example, the U.S. Navy's Columbia class submarine program represents an important investment in next generation ballistic missile submarines. Such submarines will be equipped with stealthy technology and enhanced nuclear deterrence capabilities, replacing an ageing fleet of Ohio class submarines.

Shipbuilding Market – Government Initiatives

• China's Dominance and Green Shipbuilding Focus: China's Shipbuilding industry has experienced substantial growth, with significant achievements in output and new orders. The Ministry of Industry and Information Technology stresses the importance of green Shipbuilding for future growth, setting ambitious targets in this sector by 2025. Increasing supply chain solutions, speeding up the adoption of alternative fuels and upgrading propulsion technologies are also part of these targets.
• South Korea's FDI Stimulus and Technological Leap: The South Korean government actively promotes foreign direct investment (FDI) in the Shipbuilding sector through tax cuts, incentives, and industrial complexes. By establishing Foreign Exclusive Industrial Complexes and Free Economic Zones, South Korea attracts foreign investors, facilitating technology transfer and boosting competitiveness. With world class infrastructure and favorable investment conditions, South Korea's Shipbuilding industry has gained significant technological advancements, positioning itself competitively in the global market.
• Korea's Remarkable Q1 Performance and Future Initiatives: Korea's Ministry of Trade, Industry and Energy (MOTIE) announces Korea's leadership in global Shipbuilding orders for Q1 2024, marking a significant milestone after three years. With a focus on eco-friendly and high-value-added ships, Korean shipyards have secured substantial orders, particularly in LNG carriers and ammonia ships. MOTIE's "Next Generation K-Shipbuilding Initiative" outlines plans for substantial investment over the next five years, emphasizing the development of super gap technologies and talent training, with the promotion of eco friendly and autonomous ships.
• Singapore's Attractive Incentive Schemes and Maritime Center Status: To encourage shipping companies to set up their businesses in Singapore, the Government of Singapore is offering various incentive schemes like an approved international shipping enterprise scheme. With over 100 international shipping companies, Singapore serves as a vital hub for the International Maritime Centre, leveraging its strategic location and supportive business environment to foster growth & innovation in the maritime industry.

Premium Insights

Rising global trade and naval operations are pivotal drivers of the Shipbuilding market. The main source of international trade, supporting the development of economies around the world, is freight transport which facilitates about 90% of total freight. In view of the growing supply chain and rising markets, countries are increasingly reliant on ships to lead their Shipbuilding industries forward. The growing demand for maritime transport is leading to an increase in imports & exports, driven by the deepening roots of globalization in economies. This interconnectedness is not only expanding the scope of the market, but also providing consumers with a diverse range of products at different price points, reinforcing trade dynamics as well as maintaining the growth trajectory of the Shipbuilding industry.

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Market Dynamics

• HD Korea Shipbuilding & Offshore Engineering, an intermediate holding company of HD Hyundai, secured a contract worth 133.2 billion KRW to build two PCs for an Asian shipping company. Scheduled for delivery by August 2027, these vessels will be constructed by HD Hyundai Vietnam Shipbuilding, contributing to the company's 83.9% achievement of its annual order target.
• Digital technology has revolutionized Shipbuilding processes, exemplified by the Hunter Class Frigate Program leveraging Adelaide based MG Engineering to fabricate ship blocks. Through a digital 'thread', MG Engineering completes initial construction off-site, mitigating production risks and enhancing efficiency, while also aligning with BAE Systems' operations at Osborne Naval Shipyard.
• Samsung Heavy Industries clinched a monumental $3.4 billion contract for the construction of fifteen LNG carriers, marking the largest single deal in its history. This important order, which appears to be from Qatar Energy, highlights the significance of SHI as a result of previous high value contracts with leading shipbuilders such as Evergreen Marine. This confirms South Korea's position as the world's leading shipbuilder.
• Damen Shipyards and BigLift Shipping accomplished a remarkable feat in May 2024 by transporting eleven Damen tugs from East Asia to Europe aboard BigLift’s Happy Star vessel. This operation, which usually takes six months to plan, was carried out in just over two months, demonstrating the effectiveness of logistics and planning.

Competitive Landscape

• Strategic investments, targeted acquisition and joint ventures with a view to achieving market leadership and the development of sustainable energy solutions are creating a paradigm shift in Shipbuilding.
• A significant milestone in the competitive landscape is the establishment of the Applied Shipbuilding Academy at BAE Systems’ Scotstoun shipyard. The commitment of the industry to workforce development, modernization and talent attraction is underlined in this initiative. The Academy, which is due to be completed in 2024, will provide a tailored training program for almost 4500 employees, including around 700 apprentices, marking an important investment into the future of Shipbuilding and its durability.

Recent Market Developments

• In May 2024, BAE Systems Australia is supporting local SMEs, including MyModular, Century Engineering, MG Engineering, Novafast International, Axiom, and Hobart-based CBG Systems, to adopt new technologies for future Shipbuilding. These SMEs, all trusted suppliers on the Hunter Class Frigate Program, have joined the ‘Connected Supplier’ project to enhance digital literacy and leverage technology for improved business performance. Project activities are conducted at the Line Zero – Factory of the Future facility, developed by BAE Systems Maritime Australia at the Tonsley Innovation Precinct in Adelaide, in partnership with Flinders University, the Commonwealth Government, and the South Australian Government.
• In May 2024, EDGE and Fincantieri formalized the launch of MAESTRAL, an Abu Dhabi-based Shipbuilding joint venture. EDGE holds a 51% stake in this JV, which will design and manufacture advanced naval vessels, targeting non-NATO and selected NATO member orders, with a commercial pipeline valued at approximately 30 billion euros. The UAE Coast Guard Forces announced a 400 million euro order for ten 51m Offshore Patrol Vessels.
• In May 2024, Huntington Ingalls Industries (HII) launched the “Build It” campaign during New York City’s Fleet Week to highlight shipbuilder support for the U.S. Navy. This campaign emphasizes the mission, pride, advancement opportunities, job security, and comprehensive benefits associated with building ships for national defense.
• In December 2023, BAE Systems Australia successfully trialed laser scanning technology at the Osborne Naval Shipyard and Henderson shipyard to create 3D models of pipes for the Hunter class frigate.

The global Shipbuilding market can be categorized as Manufacturing Method, Nature, Size, Application, and Region.