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Machinery

Korean shipyards retake global top spot in July with pricey LNG vessels

Aug 11, 2020 (Gmt+09:00)

South Korean shipbuilders replaced their Chinese rivals to take the top spot in the global order book last month, thanks to their supremacy in building liquefied national gas (LNG) vessels.

According to data provided by global market researcher Clarkson Research Service, Korean shipbuilders' new orders amounted to 500,000 compensated gross tonnage (CGT), or 12 ships, in July, accounting for 74% of the global new orders totaling 680,000 CGT, or 24 ships.

Korean shipyards retake global top spot in July with pricey LNG vessels


Chinese shipbuilders came in second, winning new orders of eight ships or 144,000 CGT, followed by Japanese shipyards with one ship or 30,000 CGT.

This marks the first time Korean shipbuilders have taken the top spot in the monthly global order book this year.

The stellar performance last month was largely due to the LNG ship order won by the Hyundai Heavy Industries Group.

Korea Shipbuilding & Offshore Engineering, a unit of Hyundai Heavy, signed a 1 trillion won deal to build four LNG carriers for ship owners in Europe and Bermuda. KSOE is expected to sign another contract sometime this month to build two more such vessels. The price tag for an LNG carrier averages 220 billion won ($186 million), bringing the total value of the six ships to more than 1.3 trillion won.

For the first seven months of the year, however, Chinese companies still topped the ranking with an accumulated order of 3.74 million CGTs or 164 ships, taking up 57% of total global orders. They were followed by Korean shipbuilders at 25% and Japan with 10%.

Due to the COVID-19 pandemic, global orders for new ships between January and July stayed in the doldrums, down nearly 60% from the same period a year earlier.

DEMAND LIKELY TO IMPROVE IN H2

Analysts expect overall demand to improve in the second half as Korean shipyards are awaiting LNG vessel orders, including those from Qatar, Mozambique and Russia.

Korea’s ailing shipbuilding industry was thrown a lifeline in June when the country’s “big three” shipyards signed a $19 billion order for LNG ships from Qatar Petroleum.

Last month, the Qatari state-run LNG producer signed the deal with Hyundai Heavy, Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. to build more than 100 ships through 2027, in the largest-ever single LNG vessel order.

By Man-su Choe

bebop@hankyung.com

In-Soo Nam edited this article

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