Focus on eco-friendly, high-value-added ships reflects shift towards sustainability

HD Korea Shipbuilding & Offshore Engineering (HD KSOE) is set to commence the delivery of liquefied natural gas (LNG) carriers on the 6th, marking a significant milestone in the company’s operations.

This year, HD KSOE plans to deliver a total of 139 ships, including 26 LNG carriers, 14 liquefied petroleum gas (LPG) carriers, 2 ethane carriers, 1 liquefied carbon dioxide carrier, 40 container ships, and 50 petrochemical product carriers and crude oil tankers. The majority of these vessels are high-value-added eco-friendly ships, reflecting the industry’s shift towards sustainability.

The ship in question, a 174,000-cubic-meter-class LNG carrier, was ordered by an Asian shipping company in June 2022. Built over two and a half years at HD Hyundai Samho in Yeongam, Jeollanam-do, this vessel is now ready for delivery. This delivery is part of a broader trend, as most of the ships scheduled for delivery this year were ordered after 2022, a period marked by rising ship prices due to increased cargo transport demand following the COVID-19 pandemic.

HD KSOE’s impressive performance in securing 44 LNG carrier orders in 2022, the highest number of contracts worldwide, underscores its leadership in the global shipbuilding industry. The company’s focus on eco-friendly and high-value-added ships aligns with the growing demand for sustainable shipping solutions. This trend is further supported by the Korea Trade-Investment Promotion Agency (KOTRA), which predicted a 2.6% increase in exports this year, reaching $700 billion, driven by the rise in orders for such vessels.

In addition to the LNG carriers, HD Hyundai Heavy Industries and HD Hyundai Mipo Dockyard are scheduled to deliver a 16,000 TEU (1 TEU = 1 twenty-foot container) class container ship and a 2,800 TEU class container ship to their respective shipowners on the 7th. These deliveries highlight the robust activity within the South Korean shipbuilding sector, which remains a critical component of the national economy.

The shipbuilding industry in South Korea is renowned for its advanced technology and high-quality construction. Major players like HD Hyundai Heavy Industries, HD Hyundai Samho, and HD Hyundai Mipo Dockyard continue to lead the market, particularly in the construction of high-value-added ships. The industry’s resilience and adaptability have been crucial in navigating the challenges posed by the COVID-19 pandemic, which significantly disrupted global trade and shipping.

The increased demand for cargo transport as economies recover from the pandemic has led to a surge in ship orders and prices. This has been particularly beneficial for HD KSOE, as many of the orders were made under heavy-tail contracts, where a significant portion of the payment is made upon completion of the ship. This payment structure is expected to enhance the company’s profitability, especially with the delivery of high-value-added LNG carriers.

As the global energy market shifts towards cleaner energy sources, the role of LNG carriers becomes increasingly important. These specialized ships are designed to transport LNG at cryogenic temperatures, playing a crucial role in the global energy supply chain. The demand for LNG is rising as countries seek to reduce carbon emissions and transition away from coal and oil, further emphasizing the significance of HD KSOE’s contributions to the industry.

With a strong order book and a focus on eco-friendly, high-value-added ships, HD KSOE is well-positioned to capitalize on the growing demand for sustainable shipping solutions. The industry’s outlook remains positive, with expected increases in exports and continued advancements in shipbuilding technology.

Source: Businesskorea