The shipbuilding industry has experienced significant growth, with its global market value reaching approximately US$ 149.76 billion in 2023. Projections indicate that by 2030, this market will expand to around US$ 191.67 billion, demonstrating a compound annual growth rate (CAGR) of approximately 3.6% from 2023 to 2030.
Several factors contribute to the expansion of the Global Shipbuilding Market:
- Increasing demand for commercial vessels: The rise in global trade necessitates the construction of various commercial vessels such as container ships, tankers, and bulk carriers. These vessels play a crucial role in facilitating international commerce and transportation.
- Growth of the offshore oil and gas industry: Specialized vessels like drillships and production platforms are essential for offshore oil and gas exploration and extraction. As this industry continues to expand, there is a corresponding demand for the construction of these specialized vessels.
- Rising demand for cruise ships and leisure vessels: With the increase in disposable incomes and the flourishing tourism sector, there is a growing interest in cruise ships and other leisure vessels. This trend has created a demand for the construction of new and innovative ships to cater to the preferences of travelers seeking unique experiences.
- Advancements in shipbuilding technologies: The shipbuilding industry is benefiting from the development of new technologies, particularly in the realm of digital shipbuilding. These advancements improve efficiency and reduce costs throughout the shipbuilding process, leading to increased productivity and competitiveness within the industry.
Global Shipbuilding Market Regional Insights
- Asia Pacific: The shipbuilding market in Asia Pacific is dominated by countries like China, South Korea, and Japan, which have established themselves as major shipbuilding hubs due to their technological expertise, infrastructure, and cost advantages. The region experiences a robust demand for commercial vessels, offshore support vessels, and naval ships. Government initiatives to promote domestic shipbuilding further contribute to its market dominance. In 2023, Asia Pacific is expected to hold a share of over 40% in the global shipbuilding market.
- Europe: Europe, particularly countries like Germany, Italy, and Norway, boasts a strong presence in the global shipbuilding market. Shipbuilders in the region specialize in high-value vessels such as cruise ships, luxury yachts, and complex offshore structures. Environmental regulations and a focus on sustainable shipping drive the demand for eco-friendly vessels and retrofitting existing fleets. Europe is anticipated to hold the position of the third-largest shipbuilding market in 2023, with a share of over 15%. Germany leads the way as the fifth-largest shipbuilding country globally, followed by Norway at seventh place and France at eighth place.
- North America: The shipbuilding market in North America is significant, primarily led by the U.S., Canada. The region's shipbuilding industry caters to diverse sectors, including defense, offshore energy, and inland water transportation. There is a notable demand for naval vessels, offshore support vessels, and specialized vessels for the oil and gas industry. In 2023, North America is expected to hold a share of over 20% in the global shipbuilding market. The U.S. is the fourth-largest shipbuilding country globally, followed by Canada at sixth place.
Figure 1. Global Shipbuilding Market Share (%), by Region, 2023
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Global Shipbuilding Market: Analyst Viewpoint
The global shipbuilding market is projected to witness stable growth over the next decade driven by increasing seaborne trade and replacement demand for the aging fleet. Asia, led by China, South Korea. and Japan, currently dominates the shipbuilding industry and is expected to retain its dominance supported by their large production capacities and cost competitiveness. However, countries in Europe and North America could gain some lost ground backed by rising energy trade and cruise industry. The market faces challenges from the cyclical nature of orders that are dependent on goods trade and economic cycles. Geopolitical tensions can also impact global trade routes and fleet deployment. Lingering concerns of overcapacity in certain vessel types like container ships remain a restraint. On the positive side, rising LNG (Liquefied Natural Gas) trade and subsequent demand for specialized carriers offer opportunities for shipbuilders. The replacement of aging oil tankers and bulk carriers is another factor that will support demand beyond new build orders. Regulatory changes pertaining to emission norms will drive retrofits and new technologies adoption. This can open up opportunities for shipbuilders to provide integral solutions and specialized services. Overall, the shipbuilding market is expected to see decent growth driven by replacement needs and expansion of trading lanes despite economic uncertainties in the near term. Countries promoting domestic capability and diversifying beyond commodity ship types could see relatively faster expansion.
Global Shipbuilding Market Drivers:
- Rise in Trade-related Agreements: The global shipbuilding market is experiencing growth due to a surge in trade agreements between developed and developing countries. These agreements facilitate the transportation of goods, leading to a preference shift among suppliers towards more efficient waterway transportation. This shift has prompted cargo vessel manufacturers to innovate and produce more efficient container carriers of varying sizes and capacities, thereby driving the global market growth. Moreover, the implementation of free trade agreements has led to a decrease in duties and taxes, stimulating an increase in trade activities. As a result, exporters and importers are exempt from paying certain taxes to the government. Trade bloc countries are also easing restrictions and enhancing trade flexibility. Consequently, an increase in trade agreements has led to a higher demand for robust containers, further bolstering the global shipbuilding market growth.
- Advances in Shipbuilding Techniques and Materials: Shipyards are increasingly using prefabricated modules that can be assembled into larger ship sections or whole ships. This allows for construction efficiencies, higher quality, and reduced costs and build times. Major shipbuilders like Hyundai Heavy Industries have invested heavily in modular construction capabilities. According to a 2021 report by the United Nations Conference on Trade and Development (UNCTAD), modular construction has reduced shipbuilding time by 15-30% The use of lighter, stronger materials like composites and aluminum alloys enable lighter ship designs, reducing fuel consumption and emissions. High-strength steel and aluminum alloys have replaced heavy steel in some ship types. Composites and nano-enhanced materials are also seeing increased usage. In 2021, The American Bureau of Shipping estimates that composites now comprise 5-10% of a new commercial ship's structural weight compared to almost zero just a decade ago.
Shipbuilding Market Report Coverage
| Report Coverage |
Details |
|---|
| Base Year: |
2022 |
Market Size in 2023: |
US$ 149.76 Bn |
|---|
| Historical Data for: |
2017 to 2021 |
Forecast Period: |
2023 - 2030 |
|---|
| Forecast Period 2023 to 2030 CAGR: |
3.6% |
2030 Value Projection: |
US$ 191.67 Bn |
|---|
| Geographies covered: |
- North America: U.S. and Canada
- Latin America: Brazil, Argentina, Mexico, and Rest of Latin America
- Europe: Germany, U.K., Spain, France, Italy, Russia, and Rest of Europe
- Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
- Middle East & Africa: GCC Countries, Israel, South Africa, North Africa, Central Africa, and Rest of Middle East
|
| Segments covered: |
By Type:-
- Passenger: Cruise Liners, Yachts, Ferries, Ro-Ro
- Merchant: Bulk & General, Container Vessels, Tankers/VLCC/LNG/Chemical, Special Vessels/Dredger/Tugs
- Navy: Surface(Frigates, Corvettes, Patrol Ships, Aircraft Carriers, Troop Landing Ships), Submarine
- Offshore: FPSO/FSO(LNG, FSRU), Offshore Supply Vessel(AHTS, PSV)
|
| Companies covered: |
L&T Ship Building Ltd., Mitsubishi Heavy Industries Limited, General Dynamics Corporation, BAE Systems PLC, Japan Marine United, Imabari Shipbuilding, Labuan Shipyard & Engineering, Swiftships, Damen Shipyards Group, Sembcorp Industries Ltd.,Cochin Shipyard Limited, China Shipbuilding Industry Corporation, Fincantieri S.p.A., Dae Sun Shipbuilding & Engineering Co. Ltd., and Hyundai Mipo Dockyards Co. Ltd.
|
| Growth Drivers: |
- Rise in Trade-Related Agreements
- Advances in Shipbuilding Techniques and Materials
|
| Restraints & Challenges: |
- Overcapacity and Competition
- Environmental Regulations
|
Global Shipbuilding Market Opportunities:
- Increasing R&D and Demand for LNG-Fueled Vessels: The global shipbuilding industry stands to benefit tremendously from recent advances in materials and construction techniques. One area of innovation is the increased use of alternative fuels and energy systems on ships. The demand for eco-friendly ships, driven by stricter emissions regulations, opens avenues for building hybrid, LNG-powered, and fully electric ships.
- Moreover, many market players are offering, product launches , collaborating, and signing agreements to enhance their market position
- For instance, on January 28, 2023, the second-largest shipbuilder in Japan, Japan Marine United, commenced the development of ships that run on liquefied natural gas (LNG). These LNG-powered vessels are known to curtail carbon dioxide emissions by approximately 25% when contrasted with heavy fuel oil. Projections indicate that there will be over 2,000 LNG-fueled ships in operation globally by 2030.
- Military Demand and Technology Innovation: The shipbuilding industry is experiencing a significant upswing in opportunities, primarily attributable to the proliferation of military missions and operations. This is underscored by a confluence of factors, notably the rapid technological advancements in shipbuilding. Key elements driving this surge include the strategic integration of big data for maintenance, the utilization of drones, and the development of autonomous ships, all of which have a profound impact on the industry's growth and prospects.
- Moreover, the development of autonomous ships represents a groundbreaking advancement. These vessels have the potential to revolutionize the industry by reducing operational costs, enhancing safety, and addressing workforce shortages. As a result, shipbuilders investing in autonomous ship technology stand to gain a competitive edge in a rapidly evolving market.
- For instance, on July 27, 2023, Goa Shipyard Limited (GSL) and BITS Pilani – Goa have collaboratively aligned with the Ministry of Defence's strategic focus on integrating artificial intelligence (AI) into military applications. Their partnership aims to harness AI technologies for the construction of warships and the development of military equipment.
Global Shipbuilding Market Trends:
- Growing need for digitalization and automation: Digital technologies are spearheading a profound transformation in the shipbuilding industry. Key innovations like 3D printing, augmented reality, and the Internet of Things (IoT) have been instrumental in reshaping ship construction methods. These technologies facilitate the creation of intricate ship components with unparalleled precision, leading to improved product quality.Furthermore, the integration of automation and robotics into the manufacturing process is revolutionizing shipyard operations. This integration streamlines production, reduces the need for manual labor, and consequently, lowers operational costs. More than just cost-efficiency, automation also contributes to the shipbuilding industry's shift towards predictive maintenance. By monitoring ship components in real-time using IoT sensors, shipbuilders can identify issues early, enabling timely maintenance and preventing costly breakdowns.For instance, on, November 29, 2022, Dassault Systèmes, a French multinational software corporation and Samsung Heavy Industries, an largest shipbuilders inked a significant Memorandum of Understanding. The partnership intends to pioneer a cutting-edge concept known as a "smart digital yard" within the advanced shipbuilding industry. The primary objective is to leverage innovative digital transformation technologies to establish a shipyard that operates entirely in the digital realm. By doing so, the partners aim to gain a distinct competitive advantage in the global shipbuilding landscape.
- Increased International Seaborne Trading Activities: The shipbuilding market is experiencing a significant surge in its growth rate, driven by several pivotal factors that are making a profound impact on the industry worldwide. An increase in international seaborne trading activities stands as a cornerstone driver of the shipbuilding market growth. With globalization continuing to reshape the world economy, the demand for maritime transportation of goods has surged. This has led to a heightened need for modern, efficient vessels to accommodate the ever-growing volume of global trade. Shipbuilders are tasked with meeting this demand, resulting in a thriving market.Moreover, this escalation in international trade has given rise to a pressing demand for modern and highly efficient vessels to facilitate the transportation of goods. Shipping remains the lifeblood of global trade, carrying a substantial portion of the world's goods, including raw materials, finished products, and commodities. To meet this growing demand, shipbuilders have been presented with a significant challenge and opportunity.
Global Shipbuilding Market Restraints:
- Environmental regulations: Stringent environmental regulations present a notable challenge for the shipbuilding industry, demanding costly alterations in design and technology to adhere to emissions and efficiency standards. To navigate this restraint effectively, shipbuilders must commit to investing in eco-friendly innovations and research and development efforts. This includes the development of cleaner propulsion systems, advanced hull designs, and more efficient operational practices. Simultaneously, governments can play a pivotal role by supporting research initiatives and providing incentives, such as tax breaks or grants, to facilitate the industry's transition towards greener, more sustainable shipbuilding practices. This collaborative approach helps ensure compliance with regulations while fostering environmental stewardship within the industry.
- Overcapacity and Competition: Overcapacity in the shipbuilding market is a substantial challenge, driven by an excess of shipyards and manufacturers. This surplus of industry players leads to fierce competition, often resulting in a downward pressure on prices and profit margins. Shipbuilders grapple with the struggle to secure orders and maintain profitability amid this intense rivalry. To address this restraint, consolidation and strategic alliances between shipbuilding companies can be a viable solution. By merging or forming partnerships, shipbuilders can streamline their operations, reduce redundancy, and collectively tackle overcapacity. Such collaborations enhance their competitiveness, enabling them to weather the challenges of a crowded market and ultimately thrive in the industry.
Recent Developments
New Product Launch
In August 2022, Hindustan Shipyard Limited is a prominent shipyard company based in Visakhapatnam, India commenced the construction of two Special Operation Vessels for the Indian Navy. The US$ 66.1 Mn contract will further augment Hindustan Shipyard Limited.’s shipbuilding order.
In April 2022, Yangzijiang Shipbuilding (Holdings) Ltd It is one of the leading private shipyards in China and is engaged in the construction of various types of ships, including bulk carriers, container vessels, and other commercial ships. launched Y-SMART Intelligent Technology in a move to accelerate its digital transformation and build capabilities in smart shipbuilding solutions. Y-SMART utilizes technologies like big data, AI, VR/AR, blockchain, cloud computing, and IoT.
In January 2022, China State Shipbuilding Corporation is one of the largest and most prominent state-owned enterprises in China announced a joint venture with the France-based engineering company GTT to develop membrane tank systems for LNG carriers. This furthers the company’s capabilities in building advanced LNG carriers.
Acquisition and partnerships
In April 2022, Hyundai Heavy Industries Co. is particularly well-known for its shipbuilding division, where it designs and constructs a wide range of vessels, including commercial ships, naval ships, and offshore structures such as oil rigs and drilling platforms acquired a majority stake in the robotics firm Boston Dynamics for US$ 880 million. This expands its robotics capabilities and technologies.
In January 2022, Hyundai Heavy Industries Co. signed a memorandum with the oil company Saudi Aramco to cooperate on shipbuilding, engine development, and maintenance services. This extends the partnership between the companies.
In April 2022, Hyundai Heavy Industries Co. and General Electric, which is an energy leader in providing equipment, solutions, and services, signed an agreement to develop emissions-reducing technologies for vessels. They will collaborate on fuel cells, hybrid systems, and digital solutions.
Figure 2. Global Shipbuilding Market Share (%), By Type, 2023
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Top Companies in Global Shipbuilding Market
- L&T Ship Building Ltd.
- Mitsubishi Heavy Industries Limited
- General Dynamics Corporation
- BAE Systems PLC
- Japan Marine United
- Imabari Shipbuilding
- Labuan Shipyard & Engineering
- Swiftships
- Damen Shipyards Group
- Sembcorp Industries Ltd.
- Cochin Shipyard Limited
- China Shipbuilding Industry Corporation
- Fincantieri S.p.A.
- Dae Sun Shipbuilding & Engineering Co. Ltd.
- Hyundai Mipo Dockyards Co. Ltd.
- Arab Shipbuilding and Repair Yard Company
- Keppel Corporation Limited
- United Shipbuilding Corporation
- Alexandria Shipyard
- Dormac Ship repairs
- Astican
- HOSEI CO. LTD
- ABB Group
- Mitsubishi Shipbuilding Co., Ltd.
- Siemens
- Honeywell Marine
- Bosch
Definition: Shipbuilding refers to the process of constructing ships, vessels, or boats for various purposes such as commercial shipping, naval defense, offshore exploration, and leisure activities. It involves the design, engineering, and construction of the hull, superstructure, and other components of the ship. Shipbuilding encompasses a range of activities, including steel fabrication, welding, outfitting, and installation of propulsion systems, electrical systems, and navigational equipment. The shipbuilding industry plays a vital role in global trade and transportation, serving sectors such as cargo shipping, passenger transportation, fishing, and offshore oil and gas exploration.
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