South Korean media: "China is catching up", the number of South Korean LNG carrier orders plummets!
On May 29, a South Korean media outlet, Seoul Economic Daily, published an article stating that recently, the number of overseas orders for liquefied natural gas (LNG) carriers, which are the high-value-added profit pillars of South Korea's domestic shipbuilding industry, has significantly decreased. However, the industry has already begun to diversify its shipbuilding portfolio, so it is expected that profitability will not be greatly affected.
The overseas orders for LNG carriers from HD Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean, known as South Korea's "Big Three," have plummeted. So far this year, these three companies have received a total of four LNG carrier orders.
HD Hyundai Heavy Industries has received a total of 53 ships, achieving its annual target (18.05 billion USD), but only received one LNG carrier order. Samsung Heavy Industries has secured a total of 18 ship orders, completing 27% of its annual target (9.8 billion USD), but only obtained one LNG carrier order. Hanwha Ocean has not disclosed its annual target. The company signed contracts for two LNG carriers and received 18 other ship orders.
The number of LNG carrier orders from these three companies is severely insufficient compared to last year. In the first four months of last year, the total number of LNG carrier orders from the three companies was 35. Among them, HD Hyundai Heavy Industries received eight ship orders, Samsung Heavy Industries received 15 ship orders, and Hanwha Ocean received 12 ship orders.
The industry first attributes the low volume of LNG carrier orders from the three major shipyards to China. Shipbuilding enterprises such as Hudong-Zhonghua and Jiangnan Shipyard are rapidly catching up with South Korea's shipbuilding technology for LNG carriers.
The main reason South Korean shipbuilders are struggling is due to the significant increase in the unit price of LNG carriers caused by rising raw material prices and labor costs. Chinese shipbuilders are aggressively seeking orders at lower prices.
The second phase of the Qatari LNG carrier (approximately 100 vessels) energy project orders are nearing completion, adding pressure to this year's performance.
A South Korean shipbuilding industry insider stated, "In particular, with the construction cost of each LNG carrier increasing by more than 200 million USD, overseas shipping companies are placing orders with countries like China that have lower costs."
South Korean shipbuilders are actively diversifying their shipbuilding portfolio to overcome the low volume of LNG carrier orders. In fact, South Korea's top three shipbuilders are actively engaged in the construction of LNG carriers, import and export container ships, and oil tankers.
This year, HD Hyundai Heavy Industries has received orders for 34 container ships and six oil tankers, while Samsung Heavy Industries has received orders for four oil tankers and two container ships. Hanwha Ocean secured orders for six crude oil tankers and six container ships, offsetting the sluggishness in LNG carrier orders. South Korea's three shipyards still have ample room, with their backlog of LNG carrier orders exceeding 100 vessels.
Original source: https://www.toutiao.com/article/1833506657848393/
Disclaimer: This article solely represents the views of the author.