As the West imposed sanctions on Russia's energy and the Nord Stream pipeline were blown out of a big hole, Russia's way of transporting natural gas to Europe was almost cut off. However, Europe cannot lack natural gas. Therefore, the LNG ship loaded with liquefied natural gas has become the best choice for Europe to obtain natural gas from the outside world. Against this background, it brought unexpected results to China. China's LNG ship order reception record hit a new high, and some shipyards even lined up to 2026.
Some media described it as this: when Europe needs to cross the Atlantic Ocean to receive natural gas, LNG ships are in a hurry. Against this background, China's shipbuilding industry has taken the stage. Of the 111 LNG ship orders worldwide from January to August this year, South Korea received 83, while China received 28.
Although it seems that our order volume is still a certain distance away from the order volume received by South Korea, this is also the record that our LNG ship order volume has reached a record high in recent years. The biggest reason is that we started late compared to South Korea's LNG ships. As early as the 1990s, South Korea was already the "number one player" in the field of building LNG ships. It was not until 2008 that we broke the monopoly of Japan and South Korea and built the first LNG ship.
LNG ship is different from ordinary ships. It is known as the "jewel in the crown of the shipbuilding industry" because the LNG it carries is extremely flammable. Once a leak occurs during transportation, it is easy to cause an explosion. Moreover, it often takes 30 to 50 months to build an LNG ship, which is destined to be not an easy task.
But fortunately, after recent years of hard work and development, the gap between us and South Korea in the field of LNG ship construction is slowly narrowing. In 2008, we built the first LNG ship; in 2018, our shipyard had not received an order for LNG ships; however, by 2021, our market share of newly built LNG ships in the world reached 10%; now, it has expanded rapidly to 20%.
Just a few days ago, news came out that another Chinese shipbuilding company entered the LNG ship construction market. This marks that there are already five companies in my country that can build LNG transport ships. It can be seen that although our pace is slow, we are also striving to catch up with South Korea step by step.
In addition, I just said that due to the influence of Western sanctions on Russian energy, Europe's demand for LNG ships is increasing dramatically. A director of business intelligence at a ship economy company said that in the next two months, there will be no LNG ship available to rent in the Atlantic Ocean.
public information shows that as of the end of June 2022, there were 696 LNG ships around the world, but project ships accounted for 80%, and these project ships cannot be supplied to market transportation in the short term.
Because there are too few LNG ships that can be rented, the rental fees of LNG ships have also begun to rise. LNG freight price evaluation agency said that the rental fee for LNG ships from mid-September to mid-November has reached US$105,300 per day, an increase of 124% year-on-year, setting a record high. However, even if the rental fee is so high, LNG ships on the market are still hard to find.
In addition, the time when the conflict between Russia and Ukraine ended is still unclear, and Europe and Russia are in such a stalemate. In addition, the Nord Stream pipeline has been damaged, so Europe's demand for LNG must only increase and not decrease.
However, in this context, there are too few LNG ships that can be rented, which has led to the ship owners also starting to look at building new ships. This also means that the LNG shipbuilding market will usher in a favorable period. Currently, the world's first-tier LNG shipbuilding companies have been occupied by China and South Korea. Last year, China and South Korea took over 95% of the global orders. Although South Korea accounts for 90% of the market share, we have also made some progress this year. Therefore, in the future, the number of orders we receive for LNG ships will definitely continue to grow.
In fact, not only LNG ships, but also our electric blankets and other heating equipment have also been selling well in Europe in the past few months. And these are all unexpected effects brought to us by the Western sanctions on Russian energy. I have to say that we really have to "thank you" to Europe.
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