Hudong–Zhonghua Shipbuilding under the state-owned China State Shipbuilding Corporation (CSSC) has begun building the world's first QC-Max liquefied natural gas (LNG) carrier with the world's largest capacity of 271,000㎥ (LNG cargo capacity). It is an ultra-large LNG carrier that exceeds the previous maximum size, the 260,000㎥ Q-Max (Qatar Max) class. Analysts say China is accumulating new results and experience in the LNG carrier market, where Korea's shipbuilders held a competitive edge, and could threaten Korea's competitiveness in LNG carriers.
According to the shipbuilding industry on the 16th, Hudong–Zhonghua Shipbuilding recently said it had started building QC-Max class LNG carriers. The vessel is 344 meters long and 53.6 meters wide and can carry 271,000㎥ of LNG. Compared with the 174,000㎥ class LNG carriers that Korean shipbuilders such as Hanwha Ocean and HD Hyundai Heavy Industries mainly produce, it can transport about 56% more LNG.
This ship is part of the 128 LNG carriers that Qatar ordered from Korea and China from 2020 to 2024. China won 30 ships, or about 23%, and among them, CSSC secured a contract in 2024 to build 24 QC-Max class ships for QatarEnergy.
Hudong–Zhonghua Shipbuilding is reportedly planning to deliver the first QC-Max class LNG carrier in 2028. By shortening the construction period to around 20 months, similar to Korean shipyards, analysts say it has nearly caught up with Korea in delivery speed.
Although Chinese authorities are heavily promoting the "world's first" 271,000㎥ class LNG carrier construction, the atmosphere among domestic shipbuilders is that they do not assign it more meaning than a "self order and award" between China, the largest importer of Qatari LNG, and Qatar.
Korean shipbuilders also built 260,000㎥ Q-Max class LNG carriers that Qatar ordered in the early to mid-2000s. But they have since focused on the 174,000㎥ class. While a single dock (a shipbuilding facility designed to be flooded and drained) can build three to four 174,000㎥ class ships at the same time, only up to two Q-Max class ships can be built simultaneously, which was judged to be less efficient.
However, some say Korea should be wary because China is trying out new ship technologies in areas Korea is not attempting and is narrowing the gap by gaining experience. Yang Jong-seo, a senior researcher at The Export-Import Bank of Korea's Overseas Economic Research Institute, said, "Korean shipbuilders declined QC-Max construction during (Qatar's first special project) because the numbers did not add up in terms of dock efficiency, and in the end China accumulated experience and improved quality," adding, "there is an aspect in which Korean shipbuilders did not respond strategically."
He also said, "While the 174,000㎥ class is the mainstream in the LNG carrier market because it is the most efficient, we should be wary of the possibility that we could lose the initiative in the LNG carrier market because China is building a record of orders and mounting an offensive with unit prices nearly 20% lower."
Until now, Korean shipbuilders have been assessed as having an edge in the LNG carrier market in core technologies such as cargo containment systems, transport stability, and delivery reliability. But China is continuing a fierce chase by increasing LNG carrier orders. Hudong–Zhonghua claims it has secured a technological edge for QC-Max LNG carriers, with fuel consumption 2% to 8% lower than foreign competitors and minimal LNG losses.
This year, China has raised its global LNG carrier market share to over 30%, while Korea's share has fallen to the 60% range. Hudong–Zhonghua, China's domestic leader, has delivered 62 LNG carriers since building China's first domestically produced LNG carrier in 2008, including 13 last year alone. Its current LNG carrier order backlog stands at 92 ships, and it has set a goal of increasing annual construction capacity to more than 20 ships by the end of 20230.
The elevated status of China's shipbuilding industry in the LNG carrier market is cited as a factor threatening Korea's shipbuilding industry. Lee Eun-chang, a research fellow at the Korea Institute for Industrial Economics & Trade (KIET), said, "Among the LNG carriers China is building, the volume from global orders, not domestic demand, is increasing," adding, "competition in the LNG carrier market will intensify if China stabilizes quality through repetitive production and its price competitiveness stands out." He said, "If it is proven that China can design a new hull form (called QC-Max) and mass-produce this volume to make it stable, its competitiveness will rise sharply, which I think is threatening to Korea's shipbuilding industry."