July Shipbuilding Tops Global Orders... LNG Carriers Prove Lucrative

[Asia Economy Sejong=Reporter Dongwoo Lee] The Ministry of Trade, Industry and Energy announced on the 10th that the domestic shipbuilding industry secured 55% of the global ship orders last month, continuing its world No.1 order performance following the first half of this year.

According to the Ministry, out of a total of 72 ships and 2.11 million CGT (5.3 billion USD) ordered worldwide last month, South Korea secured orders for 19 ships totaling 1.16 million CGT (3 billion USD).

By ship type, orders included 12 liquefied natural gas (LNG) carriers, 3 container ships (1,800 TEU feeder class), 3 tankers, and 1 passenger-cargo combined ship. Notably, South Korea accounted for all LNG carrier orders worldwide and 81% of eco-friendly ship orders.

Based on the continued strong order performance this year, both large and medium-sized shipbuilders in South Korea recorded high order volumes.

Large shipbuilders achieved cumulative orders worth 30.52 billion USD as of July this year, reaching 87% of this year’s order target of 35.14 billion USD. This is a 2.2% increase compared to the same period last year (29.85 billion USD).

As of the end of July, South Korean shipbuilders’ order backlog stood at 35.86 million CGT, a 26% increase compared to the same month last year (28.5 million CGT). This significantly exceeds the global order backlog growth rate of 9.2%.

The ship price index has continuously risen since hitting a low of 125.06 in November 2020 due to the COVID-19 impact, reaching 161.57 last month, the highest in 162 months since January 2009 (167.11). The ship price index represents the relative shipbuilding cost compared to January 1988, which is set as the base (100).

In particular, the average price of large LNG carriers reached a record high of 236 million USD per vessel, marking the eighth consecutive month of new highs since December last year (210 million USD).

The Ministry stated, "Due to increased demand for eco-friendly ships driven by International Maritime Organization environmental regulations and rising LNG demand caused by the Russia-Ukraine war, the strong domestic order trend centered on eco-friendly ships and LNG carriers is expected to continue in the second half of this year."