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South Korea’s Shipbuilding Industry Clinches Double Victory in October

Amid a steadfast strategy of selective order intake focusing on high-value-added vessels, the South Korean shipbuilding industry has finally surpassed China to record the world’s highest global market share.



This success comes in the wake of a continuous rise in the Newbuilding Price Index, securing both profitability and market expansion – the proverbial “two rabbits.”


According to Clarksons’ Maritime & Shipping Research Services, a U.K.-based shipbuilding and shipping market analysis firm, the total global vessel order volume in October was 2.49 million Compensated Gross Tonnage (CGT), equivalent to 60 ships and marking a 44% decrease from the same month last year.


Of this, South Korea secured orders for 1.54 million CGT (18 ships, accounting for 62%), overtaking China, which garnered 820,000 CGT (34 ships, accounting for 33%), ascending to the top spot after three months.


Clarksons’ Maritime & Shipping Research Services also reported that the cumulative orders up until October this year amounted to 33.69 million CGT (1,324 ships), a 24% decline from the same period last year.


South Korea stood at second place with 8.93 million CGT (184 ships, 27%) following China’s 19.33 million CGT (832 ships, 57%).


As of the end of October, the global order backlog decreased by 410,000 CGT from the previous month to 122.58 million CGT. By country, the order backlog was led by China with 59.06 million CGT (48%), followed by South Korea with 38.68 million CGT (32%).


South Korea’s cumulative orders from January to October amounted to 8.93 million CGT (184 ships, 27%), still significantly behind China’s 19.33 million CGT (832 ships, 57%).


However, Korean shipbuilders are likely to meet this year’s order targets through a selective ordering strategy focused on high-value-added ship types, already securing profitability.


HD Hyundai Heavy Industries Group has exceeded its annual order target, having secured a total of 143 ships (US$21.9 billion), reaching 128.2% of its annual order target amount of US$15.74 billion.


During the same period, Samsung Heavy Industries has obtained orders for a total of 26 ships, filling 69% of its order target of US$9.5 billion.


Hanwha Ocean, despite an order target achievement rate of only 21.1%, is not in a concerning position, as explained by the company, having already secured workloads for the next three to four years.


Additionally, a construction slot contract for LNG carriers with Qatar Petroleum (QP), the state-owned oil company of Qatar, signed with three domestic shipbuilders in June 2020, promises further actual order contracts within the year.


Hyundai Heavy Industries has already completed contracts for 17 LNG carriers, and both Hanwha Ocean and Samsung Heavy Industries are expected to secure orders for more than ten ships each.


Moreover, the upward trend in ship prices persists. Last month, the Newbuilding Price Index recorded 176.03 points, a 0.65-point increase from the previous month, continuing its 38-week consecutive rise since Jan. 27, 2023. This is a 14.06-point increase compared to the same period last year.


In particular, the price for liquefied natural gas (LNG) carriers, which are a focus of orders for domestic shipbuilders, has risen by US$17 million (6.5%), from US$248 million at the beginning of the year to US$265 million.


As of the end of September, 46% of the Big Four Korean shipbuilders’ order backlogs, amounting to 539 ships, were LNG carriers. With the completion of Qatar’s second-phase volume by the end of the year, it is expected to exceed 50%.


Source: Hellenic Shipping News

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