Korean shipbuilders rank No. 1 in orders booked in first half

Industry

Published: 07 Jul. 2022, 19:09

Korean shipbuilders rank No. 1 in orders booked in first half

A 174,000 cubic meter class LNG carrier built by Hyundai Heavy Industries [HYUNDAI HEAVY INDUSTRIES]

Korean shipbuilders were No. 1 globally in terms of orders booked in the first half, regaining the top spot for the first time in four years.

They are also expected to lead the rankings in the second half.

Korea Shipbuilding & Offshore Engineering (KSOE) logged a $2.21 billion order to build 10 LNG carriers, the shipbuilder announced Thursday.

A shipper from Europe ordered eight LNG vessels from Hyundai Heavy Industries, and a shipper from Oceania ordered two LNG carriers from Hyundai Samho Heavy Industries, it reported in regulatory filings.

KSOE is the largest shareholder of both firms.

Hyundai Heavy Industries will deliver a 2.23 trillion won order by November 2026. Samho Heavy Industries will deliver its 637.1 billion won order by August 2026.

The latest orders place the KSOE as a shipbuilder with the most orders for LNG carriers this year.

The Korean shipbuilders logged the largest number of orders from January to June, overtaking China, through strong sales of high value-added vessels like the LNG carriers and eco-friendly ships.

The shipbuilders won 9.75 compensated gross tonnage (CGT), or 45.5 percent of the orders made globally, in the first half of the year, according to the Ministry of Trade, Industry and Energy on Wednesday.

This is the highest since the first half of 2011, excluding the first half of last year, when ship orders surged to 10.84 million CGT due to orders having been delayed earlier due to the Covid-19 pandemic.

By value, Korean companies received $26.5 billion worth of orders, 47 percent of global orders, ranking first. China ranked second behind Korea in both order volumes at 43 percent and order amount at 40 percent.

It is the first time in four years that orders have caught up with China, based on orders from the first half of the year. High value-added ships, such as large liquefied natural gas (LNG) carriers and container ships, were a big factor.

The domestic shipbuilding industry is leading the global high value-added ship market with its technological strengths, and took 62 percent, or 6.92 million CGT, of the 11.14 million CGT orders for high value-added ships in the first half of the year.

In particular, orders for LNG carriers increased significantly due to contracts to build LNG carriers in Qatar and an increase in demand due to the Ukraine crisis. Korea received 71 percent, or 63 ships, of global orders for LNG carriers, and 43 percent of global orders for large container ships.

Korea is also leading in eco-friendly ships, which are becoming increasingly necessary due changes in environmental regulations. Eco-friendly ships refer to ships that mainly use LNG, liquefied petroleum gas (LPG), and methanol as fuel. Korea received 58 percent of global orders for these vessels.

As the orders continue, the order backlog of domestic shipbuilders stood at 35.08 million CGT as of the end of June, up 28 percent from the same period last year.

In particular, Samsung Heavy Industries (SHI), Hyundai Heavy Industries (HHI), Daewoo Shipping & Marine Engineering (DSME) and Hyundai Samho Heavy Industires took the first to fourth places in the global ship order backlog. They were followed by China's Hudong-Zhonghua Shipbuilding, Korea's Hyundai Mipo Dockyard and China's Jiangnan Shipyard.

Three of the largest Korean shipbuilders, SHI, HHI and DSME, are already booked 2025 to 2026.

The Ministry of Trade, Industry and Energy expects that orders for domestic shipbuilders will continue to rise in the second half of this year.

"There are many positive factors for domestic shipbuilders in the second half of this year, such as the increase in demand for eco-friendly ships due to environmental regulations and additional orders for LNG carriers from Qatar," said Kwon Hye-jin, manager of the shipbuilding and offshore plant division at the Ministry of Trade, Industry and Energy. "The good outlook for the shipping market is also considered a factor driving demand for ships."

BY CHUNG JONG-HOON, LIM JEONG-WON [lim.jeongwon@joongang.co.kr]