Korean Shipbuilders on a Roll as LNG Tanker Orders Keep Coming
With the year of 2018 coming to an end, Korean shipbuilders are continuing to win orders for LNG tankers from overseas shipping companies.
Greek shipping company Cardiff Gas has recently ordered two LNG carriers to Hyundai Heavy Industries Group and one to Samsung Heavy Industries. The orders for LNG carriers placed by Cardiff Gas this year are estimated at seven units for Hyundai Heavy Industries Group and four units for Samsung Heavy Industries. Nine of them already are set to be leased to large energy companies.
In the Korean shipbuilding industry, many experts expect that increasing demand for LNG will continue to boost demand for LNG tankers. LNG tanker orders increased from 10 units in 2016 and 2017 to 69 units by December this year, with 60 of them placed with three Korean shipbuilders. Virtually, Korean shipbuilders swept orders for LNG carriers.
Clarkson, a British shipbuilding and shipping analysis organization, predicted that more than 60 LNG carriers would be ordered from next year to 2027.
Shipping freight rates are also on the rise. The average freight rate for LNG carriers, which had stood at US$30,000 to US$40,000 from 2015 to last year, began to rise from the fourth quarter of last year and soared to US$82,000 in the third quarter of this year.
The Hyundai Heavy Industries Group has landed orders for a total of 153 ships worth US$13.3 billion so far this year, surpassing its shipbuilding target of US$13.2 billion for this year. By ship types, the shipbuilding company won 40 orders (25 LNG carriers and 15 LPG carriers) in the gas tanker sector where it has unparalleled competitiveness.
Daewoo Shipbuilding & Marine Engineering (DSME) also recently landed an order for an LNG carrier, surpassing 90% of its order receipt target. This year, the shipbuilder won orders for 17 LNG carriers, the third largest in its history, following 37 units in 2014 and 19 units in 2004.
Samsung Heavy Industries also won orders for four LNG carriers in December alone, recording 46 vessels worth US$5.7 billion in total orders this year. Of the total, 15 are LNG carriers.
Source: Business Korea