Global Shipping Companies 'Hijacking' Korean LNG Ships... Regain Top Spot in Ship Orders in First Half of the Year

The photo shows an LNG carrier built by Hyundai Heavy Industries. It is not directly related to the article. Photo by Korea Shipbuilding & Offshore Engineering [Image source=Yonhap News]

[Asia Economy Reporter Jeong Dong-hoon] Domestic shipbuilders are securing dominance in the LNG (liquefied natural gas) carrier market based on technological superiority. There is also an increasing trend of global shipping companies revising existing contracts and raising ship prices for re-contracting.

According to the industry on the 9th, Korea Shipbuilding & Offshore Engineering, the shipbuilding holding company of Hyundai Heavy Industries Group, recently announced that it has re-contracted with other shipping companies by increasing the contract amount for three LNG carriers contracted in January and July last year.

Korea Shipbuilding & Offshore Engineering stated that it re-contracted one LNG carrier, originally contracted with a Liberian shipping company for 198.9 billion KRW in January last year, with an Oceania shipping company for 314.1 billion KRW. Additionally, it added that two LNG carriers, originally ordered from the same Liberian shipping company for 420.7 billion KRW in July last year, were re-ordered from an Oceania shipping company for 628.2 billion KRW.

A representative from Korea Shipbuilding & Offshore Engineering said, "Due to supply disruptions of key parts required for shipbuilding, we mutually agreed with the shipowner to terminate the contract and subsequently signed a contract with a new shipowner." Following this contract change, the total order amount increased by 322.7 billion KRW from 619.6 billion KRW to 942.3 billion KRW.

These vessels are being built at Hyundai Samho Heavy Industries in Mokpo, Jeollanam-do, and are scheduled to be delivered to the shipowners in August next year and August 2024, respectively.

Meanwhile, it was revealed that domestic shipbuilders secured about 45% of the global ship orders in the first half of this year, reclaiming the world’s number one position after four years. In particular, the order ratio for high value-added ships such as LNG carriers and container ships exceeded 60%, and domestic shipbuilders ranked first to fourth in order backlog.

The Ministry of Trade, Industry and Energy announced that domestic shipbuilders secured 9.79 million CGT (compensated gross tonnage) out of the global order volume of 21.53 million CGT in the first half, accounting for 45.5%. This marked the first time in four years since 2018 that they ranked first in global order performance for the first half of the year.

China secured 43.4%, or 9.35 million CGT. Looking at the previous second half performance, domestic shipbuilders held the number one position for three years from 2018 to 2020 but dropped to second place in the second half of last year. The order performance in the first half of this year is the highest record since the first half of 2011 (10.36 million CGT), excluding the first half of last year (10.84 million CGT) when ship orders surged due to postponed demand from COVID-19.

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