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Sat, January 23, 2021 | 20:07
Manufacturing
Korean shipbuilders dominating LNG carrier market
Posted : 2018-12-10 17:40
Updated : 2018-12-10 17:40
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By Park Jae-hyuk

Korea will outpace China in terms of the number of shipbuilding orders this year and retake the top spot for the first time in seven years, due to growing demand for liquefied natural gas (LNG) carriers amid stricter environmental regulations worldwide, industry analysts said Friday.

Shipbuilders have maintained a technological edge over their Chinese rivals in how to build LNG ships that are more energy efficient and produce fewer emissions, attracting larger numbers of increasingly environment-concerned global shipping firms.

According to the analysts, Hyundai Heavy Industries (HHI) won four orders for LNG carriers worth $740 million in just the past two weeks.

As of Friday, the country's largest shipbuilder has won deals worth $12.4 billion, 94 percent of its annual target. This was the largest amount since HHI secured deals worth $13.9 billion in 2013. The company can exceed its initial goal of 2018, if it wins orders of two more LNG carriers.

Daewoo Shipbuilding & Marine Engineering (DSME) also said it signed a $370 million deal with a U.S. shipping company, Wednesday, for an order for two LNG carriers. It also won an order for an LNG carrier from a Greek shipping company, Monday.

As of Monday, the company won deals worth $6.2 billion, 85 percent of its annual target figure. It is expected to win additional orders worth up to $1 billion by the end of 2018.

In addition to the two shipbuilders, Samsung Heavy Industries is riding high on LNG carrier orders as it signed a 400.4 billion won ($357 million) deal with an Asian shipping company, Friday, for two vessels.

As of that day, it has won deals worth $5.4 billion, 66 percent of its initial goal.

According to Clarksons Research, a data provider for the offshore industry, Korean shipbuilders have won orders for over 50 large LNG carriers globally.

Analysts say the rising shipping costs for LNG carriers will result in additional orders until the year-end.

America's growing shale gas exports and China's trend of eco-friendly energy consumption are also mentioned as reasons for higher demand for LNG carriers.

Clarksons expects the amount of global LNG transports will reach 324 million tons in 2018, up 11 percent from 292 million tons in 2017. It has even forecast the amount will reach 600 million tons in 2030.

Moreover, the International Maritime Organization (IMO) tightening environmental regulations on the offshore industry from 2020 will boost sales of the Korean shipbuilders even more, as the market will grow not only for LNG carriers but also for LNG-powered ships. All the three shipbuilders have experience of building LNG-powered ships.

Against this backdrop, BlackRock said it additionally bought a 4.42 percent stake in DSME.

After the acquisition, the world's largest asset management company has become DSME's third-largest shareholder owning a 5.57 percent stake in the shipbuilder. The first- and second-largest shareholders are Korea Development Bank and KEB Hana Bank, respectively.

Analysts attributed BlackRock's decision to DSME's competitiveness in building LNG carriers.

"Despite the lowest production costs, DSME has built LNG carriers of the best quality," Hana Financial Investment analyst Park Moo-hyun said.


Emailpjh@koreatimes.co.kr Article ListMore articles by this reporter









 
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