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Shipbuilding stocks soar as US approves nuclear submarine plan, tariff deal boosts orders
Hanwha Ocean's shipyard in Geoje, South Gyeongsang Province / Korea Times photo by Kim Hyeong-joon
By Jun Ji-hye
Korean shipbuilding stocks surged Thursday following the conclusion of Korea-U.S. follow-up tariff negotiations, along with U.S. President Donald Trump’s official approval of Seoul’s plan to build a nuclear-powered submarine.
Hanwha Ocean stocks rose 6.82 percent to close at 140,900 won ($99) after hitting a record high of 151,600 won earlier in the day. Samsung Heavy Industries also gained 1 percent, ending at 30,300 won after reaching an all-time high during the session.
The benchmark KOSPI climbed 0.17 percent, or 6.82 points, to finish at 4,087.97.
After a nearly three-month tug-of-war over tariff negotiations, Korea and the United States finalized a comprehensive deal on Wednesday, following an agreement reached between President Lee Jae Myung and U.S. President Donald Trump during their summit on the sidelines of the Asia-Pacific Economic Cooperation (APEC) meetings in Gyeongju, North Gyeongsang Province.
President Lee Jae Myung and U.S. President Donald Trump walk to the venue for their summit at Gyeongju National Museum in North Gyeongsang Province, Wednesday. Joint Press Corps
Under the agreement, Korea’s $350 billion investment commitment will be divided into two parts — $200 billion in cash investments made in annual installments capped at $20 billion, and $150 billion dedicated to cooperation in the shipbuilding sector, according to Kim Yong-beom, presidential chief of staff for policy.
Seoul’s plan for bilateral shipbuilding cooperation, known as the Make American Shipbuilding Great Again (MASGA) project, will be spearheaded by Korean companies and will include both investment and guarantee components, Kim explained.
During their summit, Lee and Trump also agreed to launch a shipbuilding cooperation body under the National Security Councils (NSC) of both nations, in a bid to generate visible outcomes from the bilateral shipbuilding partnership in the near term.
Kim Doo-eon, an analyst at Hana Securities, noted that the resolution of the Korea-U.S. tariff talks is likely to be seen as the removal of a major drag on the Korean economy and stock market. He also highlighted that shipbuilders are expected to benefit from MASGA.
“With the MASGA project set to include ship financing, which provides long-term funding for the construction and acquisition of new vessels, the likelihood of Korean companies securing ship orders will increase,” the analyst said.
On Thursday, Trump announced on his social media platform Truth Social that he had authorized Korea to construct a nuclear-powered submarine to replace its aging and less agile diesel fleet.
The comments came a day after the Korean president requested during the summit that the U.S. support fuel supply for the nuclear submarines.
Jeong Dong-ik, an analyst at KB Securities, noted that the development and construction of a nuclear-powered submarine can cost trillions of won per unit.
“Given naval vessels are usually produced in sets of three or more in line with the typical fleet rotation of missions, exercises and maintenance, special-purpose shipbuilders like Hanwha Ocean and HD Hyundai Heavy Industries, as well as their partner firms, are likely to benefit from increased business opportunities,” Jeong said.