Despite Selective Orders, Love Calls... Shipbuilders Achieved Annual Targets

HD Korea Shipbuilding & Offshore achieves 133% of annual target
Hanwha Ocean & Samsung Heavy Industries expected for Qatar LNG ships

"We will selectively accept orders that are profitable"

Domestic shipbuilders have started to adopt a 'selective order' strategy, choosing contracts based on profitability, but customers continue to send love calls. Although more than a month remains in the year, some shipbuilders have already exceeded their annual targets.

HD Hyundai Heavy Industries announced on the 14th that it has signed a construction contract for two liquefied natural gas (LNG) carriers with a shipping company based in Africa. The total order amount is approximately 698.1 billion KRW, and these vessels are scheduled to be delivered to the shipping company by 2028.

Despite Selective Orders, Love Calls... Shipbuilders Achieved Annual Targets

Until September, Hyundai Heavy Industries' order achievement amount was $9.383 billion (12.48 trillion KRW), which was only 79.1% of the annual order target of $11.857 billion. Then, last month, it signed a construction contract with QatarEnergy for 17 LNG carriers of 174,000㎥ each. This single contract is the largest order amount in the history of the Korean shipbuilding industry, totaling 5.2511 trillion KRW. This instantly exceeded the annual target amount, confirming early achievement.

Affiliates Hyundai Samho Heavy Industries and Hyundai Mipo Dockyard had already met their order targets. Hyundai Mipo Dockyard achieved $3.422 billion, 93% of its $3.7 billion order target by September. During the same period, Hyundai Samho Heavy Industries secured $5.887 billion, far exceeding its $2.6 billion target.

With this momentum, HD Hyundai's intermediate holding company, HD Korea Shipbuilding & Offshore Engineering, has secured a total of 147 vessels (including one offshore plant) worth $20.89 billion this year. This is 133% of the annual order target of $15.74 billion.

The types of vessels are diverse, including 37 bunker ships, 29 container ships, 26 LPG and ammonia carriers, 39 LNG carriers, 4 pure car and truck carriers (PCTC), 7 tankers, 2 liquefied carbon dioxide carriers, 2 medium-sized gas carriers, and 1 offshore plant.

On the same day, Hanwha Ocean also secured an order worth 656.2 billion KRW for four very large ammonia carriers (VLAC) from Greece's Naftomar. These vessels will be built at the Geoje shipyard and delivered to the shipowner by the first half of 2027. With a capacity to transport 93,000㎥ of ammonia, they are the largest ammonia carriers ordered worldwide to date.

[Image source=Yonhap News]

With this order, Hanwha Ocean has secured a total of 15 vessels this year, including 5 LNG carriers, 4 ammonia carriers, and 6 special-purpose ships. The order amount is approximately $2.86 billion, achieving about 41% of the target amount of $6.98 billion.

Samsung Heavy Industries has also secured a total of 26 vessels worth $6.6 billion this year, achieving 69% of its $9.5 billion target. These include 7 LNG carriers, 16 container ships, 2 crude oil carriers, and 1 FLNG.

Although both Hanwha Ocean and Samsung Heavy Industries have not yet reached their order targets, it is expected that they will achieve them within the year. This is because the second phase of Qatar LNG carrier orders remains. QatarEnergy had announced a second phase order of more than 40 vessels in the second half of this year. Hyundai Heavy Industries secured 17 vessels, but Hanwha Ocean and Samsung Heavy Industries are expected to share the remaining 23 vessels.

However, since domestic shipbuilders have secured more than three years' worth of work, order amounts are expected to decrease from next year. Jeong Yeon-seung, a researcher at NH Nonghyup Securities, predicted, "The combined order amount of domestic shipbuilders next year will be $32.7 billion, a 23% decrease compared to the previous year." The era of abundant orders, where shipbuilders can choose only the ones they like, has arrived.