PETALING JAYA: As China narrows the technological gap with established South Korean shipbuilders, MISC Bhd
’s growing reliance on Chinese shipyards could strengthen its procurement diversification while potentially exposing the shipping group to new concentration risks.
The group embraced this structural shift by qualifying China’s Hudong-Zhonghua Shipbuilding as a supplier, with Hudong building 11 liquefied natural gas carriers (LNGCs) for the group, alongside five LNGCs being constructed by Samsung Heavy Industries (SHI).
Subsequently, China’s growing dominance reflects a changing competitive landscape, with its shipyards offering greater capacity and shorter delivery queues as South Korean yards remain heavily booked. China overtook South Korea in market share for newbuild liquefied petroleum gas carriers in 2024 and, in the first half of 2026 (1H26), also surpassed it in the LNGC category.
“China’s rise gives energy companies more capacity, shorter delivery queues and more supplier choice, particularly as South Korean yards remain heavily booked,” Coface Asia-Pacific chief economist Bernard Aw told StarBiz.
According to UOB Kay Hian (UOBKH) Research, Chinese shipyards had established scale through standard commercial vessel designs, such as crude tankers.
South Korean shipbuilders nonetheless retain expertise in executing technologically complex projects, despite the competitive gap narrowing.
UOBKH Research said even with the rapid rise of China’s shipbuilding, it was difficult to usurp South Korea’s masterclass for executing sophisticated technology, until today.
MISC, a long-standing client of SHI, continues to maintain strategic relationships with major South Korean shipyards.
Besides the five LNGC newbuilds, SHI is constructing MISC’s maiden floating storage and regasification unit (FSRU), valued at US$330mil.
“We concur with MISC’s procurement strategy to utilise all available berth slots,” UOBKH Research said, backing the group’s approach of diversifying across shipyards rather than remaining loyal to a single builder.
Although MISC has more LNGC orders with Hudong, the research house does not believe this dilutes its existing South Korean relationships.
SHI continues to undertake high-value projects for the wider Petroliam Nasional Bhd (PETRONAS) group, including the FSRU and a third floating LNG unit co-owned by PETRONAS and Sabah Maju Jaya.
Building scale through a new shipyard relationship could help MISC achieve genuine diversification amid supply-chain uncertainty and shifting geopolitical alignments, it added.
However, diversification does not eliminate the risk of greater dependence on China.
Aw said geopolitical considerations would increasingly influence procurement decisions, although cost, financing and delivery certainty would remain decisive.
“The most likely outcome is diversification across Chinese and South Korean yards, rather than dependence on either one.” As the global maritime supply chain evolves, Malaysia could also capture more value through marine engineering, vessel maintenance and digital maritime services, Aw pointed out.
He said Malaysia could leverage major orders by PETRONAS and MISC to deepen specialised engineering capabilities.
