Shipbuilding Industry Surpasses 7 Trillion Won in Orders in January Alone, Is the Sunny Day Coming?

The photo shows the sea trial of the world's first LNG-powered large container ship built by Hyundai Heavy Industries Group. Photo by Hyundai Heavy Industries Group [Image source=Yonhap News]

[Asia Economy Reporter Jeong Dong-hoon] The shipbuilding industry’s order volume for the month of January exceeded 7 trillion won. The shipbuilding sector, which had been struggling with a deficit structure, is now dreaming of a turnaround by leveraging eco-friendly ship technology.

According to the shipbuilding industry on the 6th, Daewoo Shipbuilding & Marine Engineering (DSME) secured orders for a total of 8 vessels worth approximately 1.8438 trillion won during the Lunar New Year holiday period from Marangas, a subsidiary of Angelicoussis Group, the largest shipping company in Greece, and European shipowners. These include 2 LNG carriers and 6 container ships. These vessels will be built at the Okpo shipyard and delivered to the shipowners in the second half of 2025. Since the beginning of this year, DSME has secured orders for a total of 12 vessels and offshore plants, including 5 LNG carriers, 6 container ships, and 1 offshore plant, worth 2.72 billion dollars (approximately 3.2667 trillion won). Compared to last year, this means the order amount for January to May was fulfilled within just one month. Despite concerns over financial structure uncertainties due to the failed M&A and being an acquired company, DSME has demonstrated its competitiveness by almost exclusively receiving orders from Angelicoussis Group, its long-time Greek client, since the start of the new year.

Korea Shipbuilding & Offshore Engineering (KSOE) also announced consecutive order news. Recently, it signed contracts to build a total of 9 vessels, including 2 LNG-powered ro-ro ships (vessels that can load or unload cargo via ramps) of 24,000 tons, 1 LNG bunkering vessel (a specialized ship that supplies fuel to LNG-powered ships at sea) of 12,500㎥, and 6 container ships of 2,800 TEU (1 TEU equals one 6-meter container) with three European shipping companies and one Oceania-based shipping company. The total contract value amounts to approximately 704 billion won. These vessels will be constructed at Hyundai Mipo Dockyard in Ulsan and will be delivered sequentially to the shipowners starting from the second half of next year. KSOE secured 34 vessels worth 3.7 billion dollars (approximately 4.4437 trillion won) in January alone, achieving about 21.2% of its annual order target (17.44 billion dollars, approximately 20.9314 trillion won).

The large-scale orders from KSOE and DSME came after the EU blocked the merger of the two companies. Last month, the European Commission prohibited the merger of KSOE and DSME, citing concerns that a monopoly in the LNG carrier sector would intensify. Despite concerns over financial structure uncertainties due to the failed M&A and being an acquired company, DSME has demonstrated its competitiveness by almost exclusively receiving orders from Angelicoussis Group, its long-time Greek client, since the start of the new year.

This year, the shipbuilding industry, including the Big 3, is dreaming of a revival. There is also hope that a “turnaround” (shift to profitability) is possible. With the rapidly increasing demand for replacing aging vessels, the domestic shipbuilding industry’s dominant position in LNG vessels is being recognized as a positive factor amid the global spotlight on LNG ships. The International Maritime Organization (IMO) plans to apply greenhouse gas emission regulations to vessels already in operation starting in 2023. Accordingly, shipowners are compelled to replace aging vessels that operated on heavy fuel oil (bunker C fuel oil) with the latest eco-friendly ships to reduce carbon emissions. By 2030, there will be 118 aging vessels over 25 years old, indicating a strong likelihood of continued demand for LNG vessel replacement.

This content was produced with the assistance of AI translation services.