South Korean shipbuilders are negotiating substantial deals with Qatari state companies to manufacture additional liquefied natural gas (LNG) tankers, driven by increasing demand for these carriers and container ships. The demand is pushing overall vessel prices towards record highs, positioning South Korean shipbuilders as key players in the global shipbuilding market.
Potential LNG Tanker Deals
HD Korea Shipbuilding & Offshore Engineering Co. (HD KSOE), along with Samsung Heavy Industries Co. and Hanwha Ocean Co., is in talks with QatarEnergy to supply up to 20 Q-Max LNG carriers. These carriers are larger than standard vessels, with a capacity of 270,000 cubic meters, compared to the usual 174,000 cubic meters. The potential deals, valued at approximately $6.6 billion, reflect South Korea’s continued dominance in the LNG shipbuilding sector, with previous deals already secured for standard-size LNG tankers earlier this year.
Rising Demand and Prices
The global LNG industry requires additional LNG carriers to support new liquefaction projects, fueling demand for shipbuilding. Industry reports suggest a need for 100 more LNG carriers beyond the 185 already ordered. As demand for LNG tankers grows, new building prices are increasing. Clarksons Research’s new building price index recently reached 187.98, close to its all-time high. The rise in prices is primarily driven by demand for container ships, which has surpassed LNG carriers in price due to increased orders amidst rising freight rates.
Shift in Business Strategies
South Korean shipbuilders, traditionally focused on more profitable LNG tankers, are now expanding their strategies to accommodate the rising demand for container ships. Smaller shipping companies are placing orders for container ships, especially those with LNG dual-fuel power systems, to secure delivery slots post-2028. This shift highlights the adaptability of South Korean shipbuilders to meet changing market demands and capitalize on new opportunities in the shipbuilding sector.
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Source: THE KOREA ECONOMIC DAILY
