Four ships, nearly 8 billion! The newly promoted top shipyard is full of momentum.

HD Hyundai Heavy Industries, South Korea's largest shipbuilding group, continues its strong order momentum, securing another US$1.08 billion (approximately RMB 7.774 billion) order for four LNG carriers from a loyal shipowner. The price per vessel sets a new historical high. In just the first two months of the year, Hyundai Mipo Dockyard, the group's newly promoted flagship shipyard, has already achieved 60% of its order target.

Hyundai Mipo Dockyard secures another order for four LNG carriers; new vessel delivery schedule extends to 2028.

On February 26, HD Hyundai (formerly Hyundai Heavy Industries Group), the shipbuilding holding company, announced that it had signed a contract with an Oceania shipowner for the construction of four 174,000 cubic meter liquefied natural gas (LNG) carriers. The total contract value is approximately 1.4385 trillion won (approximately US$1.08 billion). These four LNG carriers will be built by Hyundai Mipo Dockyard in Yeongam County, South Jeolla Province, and are scheduled for delivery before January 2028.

Including the latest order for four LNG carriers, Hyundai Mipo Dockyard has received a total of 10 new vessel orders this year, all liquefied gas carriers, including six LNG carriers, two VLGCs, and two VLACs. The total value exceeds US$2 billion (approximately RMB 14.397 billion), representing 63% of its initial order target of RMB 3.2 billion.

It is worth mentioning that in recent years, with the global shipbuilding industry entering a super-cycle and an increase in orders for environmentally friendly vessels, Hyundai Mipo Dockyard has received a large number of new vessel orders. In 2021, the company received new vessel orders totaling US$5.53 billion; in 2022, this figure soared to US$8.62 billion. In 2023, Hyundai Mipo Dockyard received a total of 42 new vessel orders, including 19 container ships, 8 LPG/ammonia carriers, 9 LNG carriers, and 6 oil tankers, totaling US$6.63 billion, reaching 255.1% of its annual order target of US$2.6 billion.

Currently, Hyundai Mipo Dockyard holds the largest order backlog among HD Hyundai Heavy Industries' three shipbuilding subsidiaries and remains the most successful shipbuilding subsidiary. Notably, the company achieved an operating profit of 301.7 billion won (approximately US$227 million) in 2023, a year-on-year increase of 1604.5%, and a net profit of 211.2 billion won (approximately US$159 million), a year-on-year surge of 7182.8%. Both operating profit and net profit surpassed those of HD Hyundai Heavy Industries, the long-time leader in the South Korean shipbuilding industry.

Meanwhile, HD Hyundai Heavy Industries has received orders for 46 vessels and marine equipment this year, with a total contract value of US$5.98 billion (approximately RMB 43.04 billion), representing approximately 44.3% of its annual order target of US$13.5 billion. This includes six large LNG carriers, 17 VLGCs/VLACs, two LPG carriers, 15 product tankers, one VLEC, two crude oil carriers, two LCO2 carriers, and one offshore platform topside module. Among these 46 orders, 28 are liquefied gas carriers, with a contract value of approximately US$4.06 billion (approximately RMB 29.22 billion), accounting for 68%.

Greek shipping magnate places high-value ship orders; LNG carrier prices expected to remain firm this year.

Hyundai Heavy Industries did not disclose specific information about the shipowner, but according to foreign media reports, the order comes from Capital Group, a company owned by Greek shipping magnate Evangelos Marinakis. This is Marinakis' second new vessel order from Hyundai Heavy Industries this year, following an order in January for two 22,000 cubic meter liquefied carbon dioxide (LCO2)/LPG carriers from Hyundai Mipo Dockyard.

In recent years, Marinakis has been active in the newbuilding market, and Hyundai Heavy Industries is his favorite shipyard. Including the latest order, Evangelos Marinakis currently has orders for 13 LNG carriers at Hyundai Heavy Industries, as well as two very large ammonia/LPG carriers (VLACs), four LCO2 carriers, and six feeder container ships. In addition, Marinakis has also ordered four LR2 product tankers and six Suezmax crude oil tankers from New Times Shipbuilding, and four 300,000 DWT VLCCs from Dalian Shipbuilding.

In recent years, with the recovery of the global LNG shipping and shipbuilding market, LNG carrier prices have been on an upward trend. In 2018, the price of a 174,000 cubic meter LNG carrier was approximately US$186 million, exceeding US$200 million by the end of 2021.

Especially since 2022, LNG carrier prices have skyrocketed. Driven by factors such as increased global LNG production, increased demand for upgrades due to stricter IMO environmental regulations, and the increase in LNG seaborne transportation and storage demand due to the Russia-Ukraine conflict, the LNG carrier construction market has become even hotter. Simultaneously, due to tight shipyard capacity and significant increases in raw material and energy costs, the upward trend in LNG carrier prices has continued.

In July 2022, the price of a 174,000 cubic meter LNG carrier reached US$233 million, exceeding US$240 million in August and rising to US$244 million in September. On October 21, 2022, Hanwha Ocean (formerly Daewoo Shipbuilding) signed a contract with a US shipowner for the construction of two 174,000 cubic meter LNG carriers, with a total contract value of 710.3 billion won. Based on the exchange rate of 1420.6 won per US dollar on the date of contract signing, the price per vessel exceeded US$250 million for the first time.

According to Clarksons data, the average price of a new 174,000 cubic meter LNG carrier reached US$250 million in February 2023, US$260 million in June 2023, and US$265 million in August 2023, and this price has continued to the present. The average price of the four 174,000 cubic meter LNG carriers recently sold by HD Hyundai Heavy Industries has increased by approximately 45.2% compared to US$186 million in 2018.

Market observers believe that due to the extremely limited available shipyard capacity, LNG carrier prices are expected to remain firm, even though steel plate prices have fallen by about 20% since the beginning of the year.