China’s LNG Shipbuilders Defy Slowdown as Record Deliveries Seen
(Bloomberg) -- Chinese shipyards building liquefied natural gas tankers are defying the nation’s economic slowdown as strong demand sees them set to deliver a record number this year.
The builders saw income more than double in the first five months of the year, even as industrial profits contracted in an economy strained by higher US tariffs and lingering deflationary pressure. The biggest LNG shipbuilder, the Hudong-Zhonghua shipyard, will deliver 10 tankers by year-end — contributing to a national record — and has an orderbook of 150 billion yuan ($21 billion) for 60 vessels waiting to be delivered by 2031, according to national broadcaster Chinese Central Television.
China is benefiting from a boom in demand for LNG, the fastest-growing fossil fuel, as production expands in the US and Qatar and as Chinese importers seek independent fleets to increase their trading power. The growth hasn’t come without issues, with a US government investigation concluding that Chinese subsidies unfairly benefit the nation’s shipbuilding industry and harm American competitors.
Global LNG vessel deliveries rose more than 60% to 67 units last year, taking the global fleet to 831, with another 103 scheduled to be delivered in 2025, according to the International Group of LNG Importers. The orderbook represents almost half of existing fleet capacity, it said.
China’s manufacturers have halved construction time for LNG tankers to 15 months, partly by meeting 80% of requirements from local supply chains, according to CCTV. The nation is expected to have built 15% of the global LNG fleet once all orders are complete — more than double current levels — but will still trail far behind top shipbuilder South Korea, according to BloombergNEF.
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