- Samsung Heavy Industries and Hanwha Ocean Win Major Shipbuilding Deals.
- South Korean Shipbuilders Gain Edge as U.S. Restricts Chinese Industry.
- Record Shipbuilding Orders Boost South Korea’s Global Standing.
Samsung Heavy Industries and Hanwha Ocean have recently won shipbuilding orders worth 5 trillion won in two days. While the U.S. government led by Donald Trump is strengthening efforts to suppress the Chinese shipbuilding sector, South Korean shipbuilders are gaining from a growing stream of orders, reports Chosun Biz.
Samsung Heavy Industries Expands Its Order Portfolio
Samsung Heavy Industries inked shipbuilding contracts worth 2.4 trillion won on March 17 and 18. On March 17, it received an order for nine shuttle tankers from an Oceania-based client, which was named Greece’s Chacos Energy Navigation. This 1.9355 trillion-won contract is for building nine Suezmax-class shuttle tankers, the largest type that can be navigated through the Suez Canal, for sequential delivery by the end of 2028. The next day, the company was also ordered to build two very large ethane carriers by Japan’s Mitsui O.S.K. Lines worth 466.1 billion won. Such carriers of ethane will have ethane dual-fuel engines in them to optimize efficiency and adherence to ecological rules.
Despite initial speculation that the shuttle tanker order could be split between Korean and Chinese shipbuilders, including COSCO Shipping Heavy Industry, Samsung Heavy Industries secured the entire contract. A company representative stated, “We are building our order portfolio focused on high value-added ships.” With these deals, Samsung Heavy Industries has now achieved 19 per cent of its annual order target of approximately $9.8 billion.
Hanwha Ocean Wins Historic Order from Evergreen
Hanwha Ocean on March 17 inked a 2.3286 trillion won contract with Taiwan’s Evergreen to construct six ultra-large container ships. The ships, with a liquefied natural gas dual-fuel propulsion system, have a capacity of 24,000 TEU. Each ship will be 400 meters long and 61.5 meters wide and will carry 24,000 containers on a single trip.
This contract is the first for Evergreen with Hanwha Ocean, an accomplishment considering that historically Chinese shipbuilders have controlled the ultra-large container ship market due to cheaper pricing. In shipbuilding, the agreement is regarded as a milestone in the industry, as it proves that South Korean shipbuilders are winning high-value projects against Chinese rivals. Hanwha Ocean is also in line to construct 13 LNG dual-fuel box ships for Taiwan’s Yang Ming Marine Transport, indicating further prospective expansion.
South Korean Shipbuilders Gain Competitive Edge Over China
As Chinese shipbuilders continue to hold a cost-competitiveness edge, South Korean shipyards are turning their attention to environment-friendly and advanced technologies to lure more orders. The LNG dual-fuel box ships Hanwha Ocean is ordering will include cutting-edge features like an Air Lubrication System to cut hull friction and a Shaft Generator Motor to minimize energy consumption. These technologies make South Korean shipbuilders leaders in environmentally friendly shipbuilding, capable of complying with strict international norms.
Impact of U.S. Trade Policies on Global Shipbuilding
The recent surge in orders for South Korean shipbuilders comes amid increasing U.S. restrictions on the Chinese shipbuilding industry. In January, the U.S. Department of Defense designated China State Shipbuilding Corporation as a Chinese military enterprise, requiring corporations that conduct business with the U.S. Department of Defense to end transactions with CSSC by June of next year.
The U.S. Trade Representative is also progressing with a proposal to charge port fees on shipping lines that charter ships from Chinese shipyards or use Chinese-built vessels when unloading into U.S. ports. The public hearing for this proposal is on March 24, and if the port fees are implemented, South Korean and Japanese shipyards would likely gain an increase in new orders as firms seek ways to circumvent added expenses. As global trade policies continue to advance, South Korean shipbuilders are making themselves industry leaders with a focus on innovation, green technologies, and high-value contract wins.
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Source: Chosun Biz
