Focus on High-value LNG Vessels Drives success amid global ship order decline

South Korea has outpaced China to secure the highest volume of ship orders in January, according to a report by Clarkson Research, a British shipbuilding and shipping market analysis firm. The report, released on Feb 7, highlights that South Korea captured 62% of global ship orders, amounting to 900,000 compensated gross tonnage (CGT), while China secured only 270,000 CGT, accounting for 19% of the global total. This marks a notable shift in the competitive dynamics between the two leading shipbuilding nations.

The global ship order volume in January was reported at 1.46 million CGT, representing a dramatic 74% decrease compared to the same period last year. Despite the overall decline, South Korea’s focus on high-value large vessels, particularly LNG-related ships, has positioned it favorably in the market. The country secured orders for 13 ships, while China, focusing on low-value small vessels, secured orders for 21 ships.

A significant contributor to South Korea’s success is HD Korea Shipbuilding & Offshore Engineering, which contracted 12 LNG dual-fuel container ships worth 3.716 trillion won from a European shipping company. Additionally, Samsung Heavy Industries secured an order for one LNG carrier from an Oceania shipping company for 379.6 billion won. These contracts underscore South Korea’s strategic emphasis on high-value, technologically advanced vessels, particularly in the growing LNG sector.

Both HD Korea Shipbuilding & Offshore Engineering and Samsung Heavy Industries have expressed confidence in their competitive edge over Chinese shipyards by raising their annual order targets for this year. HD Korea Shipbuilding & Offshore Engineering set its target at $18.05 billion, more than 30% higher than the previous year, while Samsung Heavy Industries set its target at $9.8 billion, slightly higher than last year.

The Clarkson Newbuilding Price Index, a key indicator of ship prices, stood at 189.38 points in January, marking a 5% increase compared to the same period last year and a 49% surge compared to 2021. This increase reflects broader economic trends and the rising demand for specific vessel types, particularly LNG carriers, which are becoming increasingly important as the world shifts towards cleaner energy sources.

The South Korean shipbuilding industry’s focus on LNG vessels is a strategic move to capitalize on the expanding LNG trade routes and the global push for more sustainable shipping solutions. This emphasis on high-value, technologically advanced ships highlights South Korea’s commitment to maintaining its competitive edge in the global shipbuilding market.

Source : Businesskorea