HD Hyundai on course for $1.55 bn order amid US-China trade war

HD Hyundai Co., the world’s largest shipbuilding group, is emerging as a key beneficiary of the Trump administration’s tariff policies as global ocean carriers are turning to South Korean shipyards to avoid heavy duties the US government is mulling against Chinese ships.

HD Hyundai Samho Co. and HD Hyundai Mipo Co., under HD Hyundai Heavy Industries Co., are set to bag orders worth about $1.55 billion in total from Capital Maritime, according to shipping industry sources on Friday.

The Greek shipowner is booking six LNG dual-fuel container ships of 8,800 TEU at HD Hyundai Samho at around $140 million each, for a total of $840 million.

It is also set to award HD Hyundai Mipo orders for a total of $710 million for eight 2,800 TEU container ships and six 1,800 TEU ships.

HD Hyundai plans to deliver the vessels sequentially over a two-year period starting in 2027.

Capital Maritime has long been a regular customer of Chinese shipbuilders. Last year, it placed an order for ten 8,800 TEU container ships with Jiangsu News Times Shipbuilding. The shipping company had been looking to secure slots at Chinese shipyards for additional 4,300 TEU and 7,000 TEU vessels.

However, it has shifted to HD Hyundai after Washington floated a plan to levy heavy duties on Chinese-made ships, or vessels operated by Chinese companies.

In February, the Office of the US Trade Representative proposed a $1 million per-ship fee on Chinese company-operated vessels that call on US ports. Vessels built in China could face charges of up to $1.5 million per port call, under the proposal.

The move comes after the US Department of Defense in January added China’s largest shipbuilder, China State Shipbuilding Corp. (CSSC), to the list of companies allegedly supporting the Chinese military.

Samsung Heavy Industries Co. recently bagged a 1.9-trillion-won contract to build nine shuttle tankers for Brazilian shipper Transpetro. The order was originally expected to be split between Samsung Heavy and Chinese shipyards.

Hanwha Ocean Co. is also in talks with Germany’s Hapag-Lloyd to build six 16,800 TEU container ships in a deal estimated at 1.8 trillion won. 

China has swept the global container ship market, undercutting South Korea with prices by about 20%. They commanded 70% of the market in 2024, up from 52% in 2022, according to Clarksons & Research.

Over the same period, South Korea's share of the global container shipbuilding market has been halved to 16% from 32%.

To offset their loss in market share, Korean shipbuilders have pivoted toward high-value-added, low-carbon ships like LNG vessels.

Since Donald Trump’s return to the White House in January, South Korean shipbuilders’ market share rebounded to 27% as of the end of March in terms of order volume, while that of China dropped to 49%.

“Cargo companies shipping to the US are increasingly steering clear of Chinese-built vessels on concerns over potential US sanctions against China,” said a shipbuilding industry official. “Global shipping companies are expected to turn more frequently to Korean shipbuilders.”

Write to Jin-Won Kim at Jin1@hankyung.com
Yeonhee Kim edited this article.