LNG Ships with Large Technology Gap 'Boom'
June LNG Ship Price 295 Billion Won
Up 21% in One Year, Record High
[Asia Economy Reporter Oh Hyung-gil] Samsung Heavy Industries has secured an order contract worth 4 trillion won in a single day, marking the largest scale ever, and is forecasting a continued winning streak in orders for the second half of the year. Expectations are growing that a record-breaking order volume could be achieved within this year.
On the 22nd, Samsung Heavy Industries announced that it had received an order for 12 LNG (liquefied natural gas) carriers of 174,000㎥ class from a shipowner in the Bermuda region. The total order amount is 3.331 trillion won, making it the largest single shipbuilding contract in the history of the shipbuilding industry. This surpasses the previous record set by Samsung Heavy Industries in March last year (20 container ships, 2.8 trillion won).
Additionally, on the same day, Samsung Heavy Industries secured an additional order for 2 LNG carriers from a shipowner in the African region, achieving a total order amount of 3.9 trillion won in just one day. This amount accounts for more than half (59%) of last year's total order volume.
Samsung Heavy Industries' order record has become a representative case reflecting the mood of the shipbuilding industry, which has experienced a boom in orders after ten years of relentless effort. There are also forecasts that the volume of LNG ship orders this year will surpass last year's record-high level.
Domestic shipbuilders temporarily lost their top position due to China's low-price order offensive but are now significantly ahead of China, especially in LNG carriers.
Looking at the global order volume by ship type up to last month, the number of large LNG carriers over 140,000 m³ has increased this year, while large container ships, oil tankers, and bulk carriers have all decreased.
The price of LNG carriers has also risen faster compared to other ship types, leading global shipbuilders to focus on securing LNG carrier orders.
However, recently, China is confident that, thanks to the resumption of production at Shanghai shipyards, it can overtake Korea in new ship orders in the second half of the year and reclaim the world's number one position.
The Chinese state-run media Global Times reported, "The achievements made in recent months, overcoming supply chain disruptions and material shortages while fighting the COVID-19 pandemic, are very significant," and added, "China is expected to surpass Korea from the second half of this year and regain the top global order share."
Nevertheless, there are also views that Korea will maintain its lead in LNG carrier orders and price increases, where the technological gap with China is evident, making it unlikely for China to catch up.
According to Clarkson Research, a British shipbuilding and shipping market analysis firm, the price of a 174,000㎥ LNG carrier, which started trading at 210 million dollars (about 270.6 billion won) at the beginning of this year, rose to 229 million dollars (about 295.1 billion won) as of the second week of this month. This is a 21% increase compared to 189 million dollars (about 243.6 billion won) during the same period last year.
An industry insider said, "As major shipbuilders secure numerous orders, the space available for ship construction is becoming scarce, so if demand for LNG carriers surges, ship prices are likely to rise further," adding, "As Europe tries to reduce its energy dependence on Russia, the resulting impact could prolong the boom in the LNG carrier market."
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