South Korean shipbuilders are sounding the alarm: the liquefied natural gas (LNG) carrier market, long regarded as a symbol of high-value-added shipbuilding, could gradually be lost to Chinese yards. In the first half of 2026, China captured 57.8% of global LNG carrier orders, according to the “First Half 2026 Market Report” published by U.S. shipping analytics firm Vesson Nautical.
A total of 90 new LNG carrier orders were placed globally during the period. Chinese builders secured 52 of them and South Korean builders 37, capturing market shares of 57.8% and 41.1% respectively. By comparison, in the same period of 2025, China and South Korea had secured 15 and 13 orders respectively — the moment South Korea lost the top spot in this segment for the first time.
A widening gap
The statistics cover the full range of ship sizes, from large LNG carriers to small vessels designed for inland waterways, and highlight the growing competitiveness of Chinese builders in a segment known for exceptionally high technical standards.
LNG carriers transport liquefied natural gas at temperatures of -163°C and require advanced cargo containment systems, thermal insulation design and long-distance stability. For this reason, they have long been regarded as a “battleground” of the world’s leading shipbuilding nations.
Market evolution
Between the mid-1980s and early 2000s, Japanese builders dominated the market, relying on Moss containment system technology. In the mid-2000s, South Korean yards — HD Hyundai Heavy Industries, Hanwha Ocean, Samsung Heavy Industries and HD Hyundai Samho — took the lead, backed by government support and competitive pricing.
China’s entry into the high-end segment began with the April 2008 delivery of the “Dapeng Sun” by Hudong-Zhonghua Shipbuilding — the first large-scale LNG carrier built in China. Today, five Chinese builders construct large LNG carriers: Hudong-Zhonghua, Jiangnan Shipyard, Dalian Shipbuilding Industry Corporation (DSIC), China Merchants Heavy Industries Haimen (CMHI Haimen) and Yangzijiang Shipbuilding. Hudong-Zhonghua is the domestic leader, with a cumulative total of nearly 70 large LNG carriers delivered.
Japanese builders, once dominant, exited the market after delivering their final orders in 2019, but announced plans to resume LNG shipbuilding in 2026 after a seven-year pause.
Capacity constraints in South Korea
More than 70% of LNG carriers currently in service worldwide were built by the three South Korean giants. However, amid a global shipbuilding boom, South Korean yards have largely filled their delivery schedules through 2029, with some orders extending into 2030.
To meet future demand, they must expand production capacity, but they are constrained by limited land resources and an overwhelming order backlog. Moreover, given the industry’s strongly cyclical nature, South Korea is reluctant to expand LNG carrier capacity “blindly”, risking high fixed costs during downturns. In response, South Korean builders are pursuing overseas production bases in lower-labour-cost Southeast Asian countries such as Vietnam and the Philippines, while focusing domestic yards on high-value-added vessels.
Meanwhile, Chinese builders are taking an aggressive expansion approach: Hudong-Zhonghua recently launched a capacity expansion and upgrade project targeting mass and intelligent production of next-generation ships. South Korean experts acknowledge that the technological gap between China and South Korea in the LNG segment is steadily narrowing, forcing the South Korean industry to develop next-generation, high-value-added sectors to maintain its competitive edge.
Information sourced from IMARINE.