[Featured Stock] US Imposes Shipbuilding Regulations on China... Samsung Heavy Industries Rises Over 7%

Samsung Heavy Industries is showing strong performance. This comes as the United States tightens regulations on Chinese ships, raising expectations of a spillover benefit for domestic shipbuilders.

As of 1:44 PM on the 25th, Samsung Heavy Industries is trading at 14,950 KRW, up 1,040 KRW (7.48%) from the previous trading day.

LNG carrier built by Samsung Heavy Industries. Photo by Samsung Heavy Industries

The U.S. Trade Representative (USTR) is considering imposing fees on Chinese shipping companies' vessels or Chinese-made ships when they enter U.S. ports. This regulation will be finalized after a public hearing scheduled for March 24.

If the announced fees are imposed, Chinese shipping companies will have to pay 1 million USD (1.4 billion KRW) per ship, and shipping companies using Chinese-made ships will have to pay 1.5 million USD (2.1 billion KRW) per ship.

Imposing fees on Chinese-made ships could eliminate China's core competitive advantage of low prices. Chinese shipbuilders are currently securing orders at prices about 20% cheaper than Korean shipyards.

The domestic shipbuilding industry welcomes the U.S.'s strengthened regulations against China. It is expected that shipping companies seeking to avoid regulatory risks will turn to Korean shipyards.

Jung Dong-ho, a researcher at Mirae Asset Securities, said, "In the future, global shipping companies' preference for Chinese shipbuilders will decline, creating opportunities for Korean and Japanese shipbuilders."