China Secures Zero Orders... Korea Sweeps Global LNG Carrier Contracts with Mastery of Minus 163-Degree Cargo

China Leads in Total Orders,
But South Korea Solidifies Dominance in High-Value Vessels
Expectations Rise for Benefits from Strengthened U.S. Partnerships

This year, the Korean shipbuilding industry has once again demonstrated its competitive edge in high-value-added vessel types by monopolizing global orders for liquefied natural gas (LNG) carriers. While China continues to lead in the number of ships and total order volume, Korea has solidified its dominance in the technically challenging LNG carrier market.

According to Clarkson Research, a British shipbuilding and shipping analysis agency, and company disclosures as of October 2, all 18 LNG carriers ordered worldwide this year have been secured by Korea's three major shipbuilders. Samsung Heavy Industries, HD Hyundai Samho (a subsidiary of HD Korea Shipbuilding & Offshore Engineering), and Hanwha Ocean have swept the entire global order volume.

At Hanwha Ocean's Okpo Shipyard Yard Dock in Geoje, Gyeongnam, a liquefied natural gas (LNG) carrier is being constructed with its lights on. Photo by Kang Jin-hyung

By company, Samsung Heavy Industries secured seven vessels (all for Oceania-based shipowners), HD Hyundai Samho obtained five (four for Oceania, one for Asia), and Hanwha Ocean won four (two for Oceania, two for North America). In addition, Hanwha Ocean's U.S. subsidiary, Hanwha Philly Shipyard, won two North American orders through Hanwha Shipping and others, bringing the Hanwha Group's total to six vessels. Of the 18 orders, 13 were for Oceania-based shipowners, four for North America, and one for Asia.

In particular, regarding LNG carrier orders from North American shipowners, there had been no orders for two years after Samsung Heavy Industries' 2022 contract, but Hanwha affiliates have resumed winning consecutive contracts this year. Following last month, Hanwha Ocean also secured one North American order (worth 353.4 billion won) this month, strengthening the position of Korean shipyards in U.S. projects. Furthermore, Hanwha Philly Shipyard will build two large LNG carriers ordered from the United States, marking the first time in about 50 years that LNG carriers will be constructed at a U.S. mainland shipyard.

In contrast, China has not secured any new LNG carrier orders so far this year. This appears to be due to a 'timing' factor, with a concentration of advance orders from state-owned shipping and energy companies in 2023 and 2024. However, in the global market, a lack of technological capability and trust remains a significant obstacle. LNG carriers are high-difficulty vessels that require ultra-low temperature cargo holds (to transport cargo at minus 163 degrees Celsius), advanced propulsion systems, compliance with environmental regulations, and the trust of financial institutions.

The landscape changes if the scope is broadened to vessel types with slightly lower construction difficulty. For LNG bunkering vessels, which require small cryogenic tanks, or LNG dual-fuel container ships that are closer to general vessel conversions, the share of Chinese shipyards is increasing. Denmark's Maersk plans to entrust 14 out of 20 dual-fuel container ships (ranging from 9,000 to 17,000 TEU) to China. France's CMA CGM is also in talks with Dalian Shipbuilding Industry Company (DSIC) in China for an order of up to 10 dual-fuel container ships with a capacity of 22,000 TEU. In terms of price per vessel, dual-fuel container ships are generally priced in the 200 billion won range, while LNG carriers are set at more than 350 billion won each.

Meanwhile, the expansion of U.S. LNG exports is considered a positive factor for the Korean shipbuilding industry. The U.S. Energy Information Administration (EIA) has projected that U.S. LNG export capacity could more than double by 2028. Accordingly, there are expectations that additional LNG carrier orders may follow as U.S.-based LNG projects increase. An industry official stated, "It is true that China has made significant technological progress," but added, "In high-value-added markets such as large LNG carriers, Korea is likely to maintain its advantage for several more years."