Chinese shipyards win Korean orders, threaten South Korea small-shipyards

22/09/2025

Dongjin Shipping, a mid-sized Korean shipping company, has commissioned the construction of new ships to a Chinese shipyard for the first time since its founding in 1984. China is actively pursuing orders for small and midsize merchant ships and offers prices that are hundreds of billions of won cheaper. If China sweeps up container ship orders, Korea’s small and midsize shipyards are expected to take a hit.

According to the shipping industry on the 15th, Dongjin Shipping recently placed an order with China’s Yangtze River Shipbuilding for three 1,100-TEU container carriers for a total of $69 million (about 96 billion won). The ships are scheduled to be delivered sequentially starting in 2027.

A Dongjin Shipping container ship is seen. /Courtesy of Dongjin Shipping

Until now, Dongjin Shipping has ordered ships from Korean shipbuilders such as HD Hyundai Mipo. Dongjin Shipping operates a total of eight vessels, including break-bulk ships (cargo ships that carry goods difficult to containerize) and container ships. Because it focuses on the Intra-Asia route connecting Korea, China, and Japan, it has built its fleet around small and midsize container ships (feeder ships).

Chinese shipbuilders have been ramping up efforts to win orders for small and midsize merchant ships since the United States in Apr. imposed port entry fees on Chinese shipping companies and China-built ships. The port entry fees vary by ship size and distance, creating constraints on securing orders for large merchant ships.

The Office of the United States Trade Representative (USTR) plans to impose port entry fees based on net tonnage or per container when ships built in China call at U.S. ports starting Oct. 14. However, container ships of 4,000 TEUs or less, ships operating on short routes of 2,000 nautical miles or less, and bulk carriers of 55,000 DWT (deadweight tonnage) or less will be exempt from the port entry fees.

As a result, for shipowners, it has become advantageous to assign small and midsize ships to Chinese shipbuilders, which can build them at relatively lower prices. HD Hyundai Mipo won an order for two 2,800-TEU container ships at a little over 79.7 billion won per vessel, while China’s Jinglu Shipyard secured three 3,000-TEU ships at $43 million (about 59.6 billion won) each.

A Korea Investment & Securities researcher said, “China’s push to secure orders for small and midsize ships is intense,” and added, “Korean small and midsize shipyards must respond by pursuing facility consolidation or product diversification.”

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