Orders for LNG carriers surge, boosting South Korean shipbuilders' hopes of meeting their order targets

2018-12-20 08:44

South Korean shipbuilders have seen a significant increase in new LNG carrier orders this year, securing almost all global orders for large LNG carriers. With the significant increase in LNG carrier orders, the three major South Korean shipbuilders are expected to achieve their annual order targets.

According to Yonhap News Agency, data up to December 18 shows that a total of 65 new LNG carrier orders were placed globally this year. South Korean shipbuilders received 56 of these orders, accounting for 86% of the global market share. Hyundai Heavy Industries Group secured 25 LNG carrier orders, Daewoo Shipbuilding & Marine Engineering 17, and Samsung Heavy Industries 14.

To meet their annual order targets, the three major South Korean shipbuilders are making a final push at the end of the year with LNG carriers! Orders in December alone reached 11 vessels (5 by Daewoo Shipbuilding & Marine Engineering, 3 by Hyundai Heavy Industries, and 3 by Samsung Heavy Industries), exceeding the 9 vessels ordered in all of 2017. Industry insiders believe that with the significant increase in LNG carrier orders, the three major South Korean shipbuilders have almost achieved their annual order targets.

Hyundai Heavy Industries Group's current order volume has reached US$13.4 billion, exceeding its order target of US$13.2 billion. The group received a total of 153 new vessel orders this year, including 56 tankers, 50 container ships, 40 liquefied gas carriers (25 LNG carriers and 15 LPG carriers), 4 bulk carriers, 2 frigates, and 1 car ferry.

Daewoo Shipbuilding & Marine Engineering received a total of 44 new vessel orders this year, including 16 VLCCs, 7 container ships, 16 LNG carriers, and 5 specialized vessels, with a total value of US$6.4 billion, exceeding 90% of its annual order target of US$7.3 billion.

Samsung Heavy Industries' annual order target is US$8.2 billion, with current orders at approximately US$5.5 billion, still some distance from its annual target. The company received 45 new vessel orders, including 14 LNG carriers, 13 container ships, 15 tankers, and 3 specialized vessels.

Analysts at the China Shipbuilding Industry Corporation (CSIC) Research Center stated that driven by China's green energy consumption and the US's active LNG export policies, coupled with a significant increase in LNG shipping freight rates (from US$78,000/day at the beginning of the year to US$190,000/day at the end of November, a 144% increase), and stable ship prices at US$180-190 million, large LNG carriers have become the most sought-after vessels in the market this year.

Park Moo-hyun, an analyst at Hana Financial Investment, predicts that the price of new LNG carriers may increase to US$250 million per vessel in the next year, significantly higher than the US$187 million earlier this year.

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