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Prospects for China's Shipbuilding and Secondhand Ship Markets

Prospects for China’s Shipbuilding and Secondhand Ship Markets

China now dominates shipbuilding.  A U.S. think-tank report notes that over the past two decades China’s share of world commercial shipbuilding rose from 5% to over 50%, while the U.S. share fell to near 0.1% .  Another analysis stresses China’s current market power: it holds nearly three‐quarters of global shipbuilding orders, compared to roughly 1% for the U.S.  This massive capacity means Chinese yards build all major ship types, from mega container vessels to ultra‐large LNG carriers.  For example, QatarEnergy alone placed an order in 2024 for six ultra-large (QC-Max) LNG carriers – each carrying 271,000 m³ – from Chinese state shipyards .  Such demand reflects broader energy trends: international forecasters (like Shell) expect world LNG demand to rise ~60% by 2040, driven largely by fast-growing import needs in China and India . This global demand boom for LNG and raw materials underpins China’s strong shipbuilding orders.

China’s Shipbuilding Sector Today

Chinese shipbuilders are fully integrated and world-class.  Major shipyard hubs include Shanghai (Hudong–Zhonghua, Jiangnan), Jiangsu (Yangzijiang, Chengxi), Guangdong (Nansha, Yangjiang), and Liaoning (Dalian).  These yards can deliver cutting-edge vessels. For instance, in late 2024 a Chinese yard delivered a record‐sized 24,000+ TEU container ship, and several first-of-their-kind methanol/LNG dual-fuel  vessels are also now in production.  In 2024–2025 Chinese yards won continued large orders: apart from Qatar’s LNG ships, global carriers like Germany’s Hapag-Lloyd signed major deals.  (Hapag-Lloyd, for example, ordered 24 large container ships from Chinese yards in late 2024, a $4 billion deal .)  These examples show Chinese yards are trusted by major shipowners for both scale and advanced designs. Overall, China’s yards produced well over half of all new shipping capacity in 2024 (by tonnage), far outpacing any other country .

Growth Drivers

Several factors drive China’s shipbuilding boom.  First, rising trade volumes boost demand for ships. After a slowdown in 2020–21, global trade volumes picked up again.  For example, major carriers like Maersk project container trade growing by much of 2025, thanks to recovering U.S. and Asian demand.  Domestically, China’s economy continues to grow (about 4–5% nominally), and state-owned carriers (COSCO, China Merchants, etc.) are investing heavily in new fleets for oil, gas, and goods.  Second, government support plays a key role. Shipbuilding is a strategic industry in China’s national plans, attracting subsidies, tax breaks, and state bank financing. Recent policies have specifically encouraged “green” ships (using LNG, methanol, etc.), so China has subsidies and financing schemes for cleaner vessels. Third, technology and modernization help Chinese yards win orders at competitive prices. Chinese shipyards have adopted digital design, robotics, and modular construction to speed up builds. They also focus on low-emission technology: in 2024 roughly half of new ship orders worldwide were for alternative-fuel arrangements (mostly LNG dual-fuel), and Chinese yards captured much of that business . Finally, China’s role in global energy markets (e.g. new LNG import terminals at home, and building/exporting pipelines abroad) generates extra shipping demand. For instance, China signed major LNG import deals (like a 2024 agreement with QatarEnergy) that will require hundreds of new LNG shipments, locking in orders for tankers and carriers.

China’s Secondhand Ship Market

Alongside new builds, China’s secondhand ship sector is vibrant. Chinese companies are now major players in buying and selling used ships globally. For shipowners, the secondhand market offers a fast way to adjust fleet capacity: instead of waiting years for a newbuild, a used cargo ship or tanker can be acquired quickly. In recent years Chinese shipowners (both state and private) have aggressively expanded their fleets via S&P (sale and purchase) deals. Industry reports note that in 2024 Chinese buyers led the world in acquiring used ships, surpassing traditional leaders like Greek owners.  Domestic ship leasing firms (such as CSSC Leasing, China Merchant Leasing, etc.) have grown to provide financing for these deals.  China also developed active auction markets for idled vessels.  Used ship values remain relatively high after the boom of 2021–2022, but they are sensitive to freight rates: in late 2024–2025 some prices dipped when charter rates softened. An example of market sensitivity: U.S. proposals to charge port fees on Chinese-built bulk carriers briefly slowed Chinese buying of those ships, though withdrawals of the plan later revived the market. Overall, the secondhand market provides flexibility, allowing Chinese shipping companies to modernize their fleets or seize market opportunities.

Challenges and Constraints

Despite strong demand, there are headwinds. One major issue is overcapacity. Chinese yards expanded aggressively in recent years, and by 2025 many shipyards face competition for orders. Worldwide newbuilding contracting collapsed about 50% in the first half of 2025, indicating a saturated market. Too many yards chasing too few orders could drive down prices and profits, especially for less efficient yards.  Environment regulations also loom large. The shipping industry must meet stricter emissions rules (sulfur, carbon, methane). While LNG and methanol ships emit less CO₂ than oil-fueled ones, they still produce greenhouse gases. Future IMO standards (post-2030) may force even cleaner technologies. Retrofitting existing ships with scrubbers or new engines is costly, and building ships ready for, say, ammonia or hydrogen fuel adds expense. These costs may pressure shipbuilders’ margins unless markets pay a premium for green designs. In addition, geopolitics and trade barriers pose uncertainties. U.S. investigators in early 2025 estimated China’s government support helped it capture over half of global shipbuilding, and as a result the U.S. proposed hefty tariffs and port fees on Chinese ships. For example, Washington plans to charge up to $18 per tonne for large Chinese-made vessels calling at U.S. ports. Such policies make some international buyers cautious; a few shipowners are even reflagging or shifting business abroad to avoid perceived risks . Ongoing U.S.-China trade frictions or similar moves by others (EU investigations, etc.) could dampen foreign orders for Chinese newbuilds. Finally, freight rate volatility remains a challenge. The profitability of newbuilding and buying secondhand ships depends on future shipping rates. If global trade slows or routes shift (e.g. more overland auto production), the oversupply of ships could depress charter rates. In fact, freight rates for some bulkers and tankers fell in 2024–2025, which could prompt shipowners to delay fleet expansion.

Opportunities and Outlook

Looking ahead, there are reasons for optimism alongside the risks. In the long run demand for shipping capacity should stay robust. Even as renewable energy grows, practical factors still drive LNG, oil, and commodity trade. Shell’s forecast of a 60% rise in LNG demand by 2040 suggests many more LNG carriers will be needed. Carbon targets also create a market for new technology: ships powered by methanol, ammonia, or batteries will be in vogue. Chinese yards have begun developing these ships (e.g. first miles with ammonia-compatible engines), positioning them well if clean fuel mandates tighten.

Further, China’s push on “smart manufacturing” can enhance competitiveness. Chinese shipyards are increasingly using AI, 5G, and automation to cut build times and costs. For instance, digital design tools can produce a vessel plan in days instead of months, and automated welding boosts consistency. These innovations could allow China to maintain low prices while improving quality, a key advantage in winning international orders.

There are also new markets for growth. China is strengthening maritime ties with Belt & Road countries; Chinese firms often finance port and logistics projects abroad, which opens demand for ships. Chinese shipbuilders have signed joint ventures or supply deals in Southeast Asia, Africa, and Latin America. If China’s ship financing arms continue to offer attractive leases, foreign shipowners might favor Chinese-built ships despite political noise. Industry consolidation and finance innovations will also help: large Chinese owners and yards can pool orders to stabilize production, and new financing (green bonds, leasing, etc.) can underwrite costly eco-friendly ships.

In summary, China's shipbuilding and secondhand ship markets remain central to global shipping. China's command of shipbuilding – backed by scale, state support, and technology advances – ensures it will be a leading ship supplier for years. The booming secondhand segment adds flexibility to fleet growth. Going forward, Chinese stakeholders should focus on innovation (especially low-carbon technology and digitalization) and stay agile to market shifts. By balancing capacity with demand and navigating policy risks, China’s maritime industry can continue to thrive in the evolving global fleet landscape.

Sources: Industry and news reports (FT, Reuters, AP) on shipbuilding orders, market shares, and energy demand were used to provide the data and forecasts above , along with analyses of U.S.-China trade impacts . These reflect the latest (2024–2025) information on maritime trends.


Learn more:

   1.Top 10 Chinese Second-hand Ship Trading Platforms

   2.China's shipbuilding dominance poses economic and national security risks for the US, a report says

   3.LNG demand to jump 60% by 2040, Shell forecasts



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