HD Hanjoyang Achieves 73% of Annual Order Target in Just 100 Days This Year

Advances in Ammonia and LNG Ships

Perspective view of HD Hyundai Heavy Industries' ultra-large ammonia carrier. Photo by HD Hyundai Heavy Industries

Shipbuilders under the HD Hyundai Group have achieved 73% of this year's order target within just 100 days since the beginning of the year. In particular, the shipbuilding industry, which is experiencing a boom centered on 'eco-friendly ships' for the first time in 10 to 15 years, is filling its docks exclusively with high value-added vessels.

According to the shipbuilding industry on the 15th, HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company for shipbuilding under HD Hyundai Group, has secured a total of 86 orders so far this year, accumulating an order backlog worth $9.86 billion (approximately 13.6561 trillion KRW). This corresponds to 73% of the annual order target of $13.5 billion (approximately 18.6975 trillion KRW). Among HD Korea Shipbuilding & Offshore Engineering’s subsidiaries, HD Hyundai Samho Heavy Industries, which mainly produces eco-friendly ships, has secured a total of 23 orders worth $3.54 billion (approximately 4.9029 trillion KRW), achieving 110.7% of its annual target of $3.2 billion (approximately 4.432 trillion KRW). HD Hyundai Heavy Industries has fulfilled 50.1% of its annual order target, while HD Hyundai Mipo Dockyard is currently at 87.3%.

The quality of orders has also improved. HD Korea Shipbuilding & Offshore Engineering has secured contracts for building 6 LNG (liquefied natural gas) carriers, 32 PC vessels, 32 LPG (liquefied petroleum gas) and very large ammonia carriers (VLAC), 1 ethanol carrier, 2 liquefied carbon dioxide carriers, 6 very large crude carriers (VLCC), 3 tankers, 2 pure car and truck carriers (PCTC), and 1 floating storage and regasification unit (FSRU). The company also secured one offshore facility. The company has filled its docks this year focusing on high value-added vessels such as VLACs and LNG carriers. The average price per VLAC exceeds 160 billion KRW, and the price per LNG carrier ranges between 300 billion and 350 billion KRW.

This year, the remarkable progress of VLACs transporting ammonia stands out. Ammonia is regarded as the most efficient transportation method for hydrogen, which is gaining attention as an eco-friendly energy source. Ammonia does not produce carbon dioxide during combustion and has a liquefaction point of -33°C, which is higher than hydrogen’s -253°C, making transportation and storage easier. It can store about 1.7 times more hydrogen per unit volume than liquefied hydrogen. Ships built as ammonia carriers can also typically transport LPG.

Domestic shipbuilders such as HD Korea Shipbuilding & Offshore Engineering and Hanwha Ocean have notably increased orders for ammonia carriers, with the first ships ordered this year being ammonia carriers. The three major domestic shipbuilders have swept all ammonia carrier orders placed worldwide this year. Of the 38 VLACs ordered so far this year, HD Korea Shipbuilding & Offshore Engineering secured 32 (84.2%). HD Korea Shipbuilding & Offshore Engineering has demonstrated strengths in building new eco-friendly fuel carriers based on its experience in constructing gas carriers, including being the first in the industry to develop an ammonia fuel supply system in 2021. According to global market research firm Precedence Research, the global ammonia market is expected to grow at an average annual rate of 5.8%, increasing from $212.7 billion to $353.3 billion (approximately 478 trillion KRW) by 2032. According to Clarkson Research, a UK-based shipbuilding and shipping market analysis firm, VLAC orders will begin in earnest this year, with an expected average annual order volume of 120 vessels over the next 20 years.

HD Korea Shipbuilding & Offshore Engineering was the only one among the three major shipbuilders to achieve its annual order target last year as well. It secured a total of $22.32 billion in orders last year, achieving about 141.9% of its target. Samsung Heavy Industries secured $8.3 billion, and Hanwha Ocean secured $4 billion, achieving 87% and 57.3% of their annual targets, respectively.