Korean shipyards once again expect LNG ship boom
South Korean shipbuilders, which emerged as the world’s No. 1 in terms of new orders in 2018 on increased demand for LNG ships, are anticipating solid demand for vessels this year, industry sources said Wednesday.
Local shipyards, led by Hyundai Heavy Industries Co., bagged orders to build a total of 60 LNG ships last year, almost sweeping all such deals placed around the world and making up for dearth of demand for high-priced offshore facilities.
Demand for LNG carriers has been on a steady increase in line with a rise in LNG demand, backed by eco-friendly policies in China and the proactive push for energy exports by the United States.
For 2019, demand for LNG ships is expected to remain firm, with local shipyards set to win more deals to build such ships.
This year’s LNG ship orders will be similar to last year’s, according to the sources.
“In terms of technology, local shipyards have strong competitiveness,” said Park Moo-hyun, an analyst at Hana Financial Investment. “For the time being, their market status won’t be threatened.”
Expecting another boom year for LNG ships this year, local shipyards jacked up the order target by more than 10 percent.
Hyundai Heavy, the world’s largest shipyard by sale, will strive to win orders valued at US$11.7 billion, up 15 percent from last year.
Daewoo Shipbuilding & Marine Engineering Co., another major shipyard here, said it will try to secure $8 billion in deals, up 10 percent over the cited period. Samsung Heavy Industries Co. is seeking to post a 24 percent spike in this year’s orders worth $7.8 billion.
“Demand for bulk carriers and container vessels is waning due to an economic slowdown and the ongoing trade war between the U.S. and China,” said Choe Jin-myung, an analyst at NH Investment & Securities. “Their focus on LNG ships will help further expand their market share.”