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The average cycle in the shipbuilding industry lasts about 20 years. Today, most leading Chinese shipbuilders have order books extending beyond 2030. At the 2026 North Bund International Shipping Forum, China's shipbuilding capacity became a hot topic. The global shipbuilding industry is currently in a new upcycle, and as a major shipbuilding nation, China's shipbuilding industry is naturally operating at full capacity in this cycle. According to data released by China's Ministry of Industry and Information Technology, from January to June this year, China's new shipbuilding orders accounted for 82.3% of the world total. Norbert Kray, senior vice president and chairman of Greater China at DNV, told Yicai that China is currently the only country in the world capable of producing and delivering all types of ships. Therefore, China's shipbuilding industry has grown very rapidly in this cycle, with order volumes significantly higher than in recent years, and the competitiveness of Chinese shipyards is comprehensive competitiveness, not merely low prices.
On Changxing Island in Dalian, Liaoning Province, China's shipbuilding industry has the world's largest single shipbuilding base, featuring an 860-meter dry dock and the industry's largest 2,000-ton gantry crane. This is a shipyard under Hengli Heavy Industries Group. Hengli Heavy Industries revitalized the former South Korean STX Dalian shipyard in 2022 after it had been idle for a decade. Four years later, this young shipyard has already ranked among the leading enterprises in the global shipbuilding industry. In the first half of 2026, Hengli Heavy Industries ranked first in the world in order backlog for very large crude carriers (VLCCs). At present, the company has received more than 550 orders cumulatively, its global order schedule extends to 2030, and more than 190 ships have already begun construction. This reflects one aspect of China's shipbuilding strength. In the century-long turbulence of the global shipbuilding industry, technology, scale, and willpower collide. From 19th-century Britain, to postwar Japan, and then to South Korea at the end of the 20th century, the crown of shipbuilding has changed hands several times. South Korea was once known for technological leadership and high quality, especially in the fields of liquefied natural gas (LNG) carriers, VLCCs, and liquefied petroleum gas (LPG) carriers, with companies such as Cheniere Energy and Dorian LPG representing key players in these related markets.
However, shipbuilding is a complex and comprehensive industry that requires high levels of capital, technology, and labor intensity. South Korea currently faces a relative shortage of labor. South Korean labor costs account for more than 20% of production costs, while China's are much lower. South Korean shipyards have long delivery cycles and limited production efficiency, while China, through intelligentization and localized supply chains, has shortened VLCC construction time from one year to 180 days. Kray told Yicai that there is a certain price gap in labor costs between China and South Korea, but China's labor costs are also rising. Today, the price advantage of Chinese shipyards mainly comes from efficiency. It is comprehensive competitiveness, not a simple labor cost advantage. At the same time, about 4,500 shipbuilding engineers graduate from universities in China each year and enter the market, providing a large talent reserve, while young people in South Korea are less willing to work in shipyards. According to China's Ministry of Industry and Information Technology, from January to June this year, China's shipbuilding completed volume was 36.5 million deadweight tons, up 51.2% year on year, accounting for 62.2% of the world total; new orders were 121.06 million deadweight tons, up 173.1% year on year; and as of the end of June, the order backlog was 363.25 million deadweight tons, up 54.9% year on year, accounting for 71.2% of the world total. China's three major shipbuilding indicators all grew comprehensively, and its international market share remained globally leading.
The shipbuilding cycle. Today's prosperity in China's shipbuilding industry is partly due to the super cycle in the global shipbuilding industry. However, recalling the ups and downs of the previous cycle, many people in the shipbuilding industry are also wondering how long this round can last. Looking back at the shipbuilding industry, each average cycle lasts about 20 years. The length of the shipbuilding cycle is closely related to the service life of ships. Usually, the retirement age of a ship is 20 to 25 years, which is comparable to the length of past shipbuilding cycles. The previous upcycle began around April 2002 and ended in August 2008. The newbuilding price upcycle lasted 77 months, with an increase of 87% from the bottom. In the second half of 2008, with the outbreak of the international financial crisis, global shipping and shipbuilding demand turned sharply, new orders fell off a cliff, and that super cycle came to an abrupt end. The industry then entered a long period of capacity clearance and downturn from 2009 to 2020. Kray told Yicai that compared with the previous upcycle, this cycle has many differences on both the demand side and the supply side. In the previous cycle, many orders had investment and speculative characteristics; this round comes more from green capacity renewal, the restructuring of the transport market under geopolitics, the resilience of key resource transportation, and demand to replace old ships. Kray further explained that the shipping industry is currently facing a green transformation. A large number of old ships have low efficiency and do not use alternative fuels. Shipowners face capacity renewal demand before the 2029-2030 delivery window, which makes the demand side of this round "healthier and more sustainable." Li Yanqing, vice president and secretary-general of the China Association of the National Shipbuilding Industry, also said that China's share of new global green ship orders has reached more than 68% for three consecutive years, and it remained at a high proportion in the first half of this year, showing that China's shipbuilding industry is accelerating its transformation toward the mid-to-high end. However, Kray also stressed that no one can accurately judge how long this cycle will last. Current order visibility has reached 2029-2030. Chinese shipyards are well prepared to cope with cyclical fluctuations, but high order volumes also bring pressure on talent, supply chains, and quality control. The biggest difference between this cycle and the previous one is that the demand drivers are more oriented toward green development and resilience, but cyclical fluctuations themselves remain unavoidable.
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