Big 3 Korean Shipbuilders See Orders Worth 136 Trillion Won
HD Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean, three major Korean shipbuilders, have accumulated orders worth over 130 trillion won. Having secured a substantial workload, these shipbuilders are focusing on enhancing profitability and developing new types of vessels.
According to the shipbuilding industry on June 20, the outstanding orders of these three companies in the shipbuilding sector amounted to 707 ships and US$106.1 billion (136 trillion won) as of the end of last month. This figure excludes orders from other sectors such as marine, plants, and engines. The volume of work has increased by 53 vessels and US$17.3 billion (22 trillion won) compared to a year ago.
As of the end of last month, HD Hyundai Heavy Industries had secured a workload of 442 vessels and US$55.6 billion (71 trillion won). Samsung Heavy Industries’ outstanding orders were 143 vessels and US$26.4 billion (34 trillion won), while Hanwha Ocean had accumulated orders for 122 vessels and US$24.1 billion (31 trillion won).
With ample orders, these companies are all emphasizing profitability. They have enough orders to receive vessels scheduled for delivery by 2028 and do not accept items without profitability. Selective ordering has also led to rising ship prices. The Newbuilding Price Index from Clarkson Research, a price indicator for newly constructed vessels, has exceeded its historical high of 170.
However, there remains the task of securing a workforce that has become scarce as orders have piled up. It’s also a burden that orders are concentrated in Liquefied Natural Gas (LNG) vessels and container vessels. If the market conditions of these vessels worsen, an order drought could occur at any time, necessitating the need for new opportunities. Currently, among the outstanding orders of 707 vessels of the three shipbuilders, the proportions of LNG vessels (253 vessels, 35.8%) and container vessels (245 vessels, 34.7%) exceed 70%.
The three shipbuilders are expanding their recruitment and increasing investment in research and development for eco-friendly vessels. HD Hyundai Heavy Industries is making strides in the market for methanol-propelled ships, considered the next-generation eco-friendly fuel. Among the 87 methanol-propelled vessels ordered worldwide, HD Hyundai Heavy Industries has secured construction contracts for about half, or 43 vessels. Samsung Heavy Industries and Hanwha Ocean are also developing methanol-propelled vessels, as well as hydrogen and ammonia carriers and carbon dioxide carriers.
Note: Article by Jasmine Choi (www.businesskorea.co.kr)