Korea’s 3 Largest Shipbuilders Post 93% Share of LPG Carrier Market

Korean shipbuilders have recorded a share of more than 90 percent in the world LPG carrier market, after landing second-batch orders worth more than US$10 billion for LNG carriers from Qatar Energy’s LNG project. That LNG project has been underway for about six months since October 2023.

A total of 37 LPG carriers were ordered globally in the first quarter of this year, according to British shipbuilding and shipping analyst Clarkson on May 9. About US$3.9 billion was invested in these orders. The big three global builders — HD Korea Shipbuilding & Offshore Engineering (KSOE), Hanwha Ocean, and Samsung Heavy Industries — accounted for 33 (US$3.63 billion) of these orders. They account for 89.1 percent by number of vessels and 93.1 percent by value of orders.

HD KSOE won orders for 29 LPG carriers (US$3.15 billion) in the first quarter alone, accounting for 80.8 percent of the global market by value. By vessel type, very large crude carriers (VLCCs) which are 88,000 cubic meters and above accounted for US$2.25 billion (21 vessels) and middle gas carriers (MGCs) accounted for US$600 million (8 vessels). The VLCCs will be built by HD Hyundai Heavy Industries and HD Hyundai Samho Heavy Industries while HD Hyundai Mipo Dockyard will build the MGCs.

Hanwha Ocean and Samsung Heavy Industries were also successful in winning orders for two VLCCs each in the first quarter of 2024.

The big three shipbuilders once again proved their dominance of the global LNG carrier market, winning orders for 44 LNG carriers in the second batch of orders for Qatar Energy’s LNG project in about six months from October last year to April 1 this year. These vessel orders are worth more than US$10.1 billion.

While the Chinese shipbuilding industry is expanding its market to include not only bulk carriers, but tankers and container ships due to its price competitiveness, the Korean shipbuilding industry is maintaining its competitive advantage in the high-value-added gas carrier market with its high technology and reliability.

Shipping companies are responding quickly to changes in the eco-friendly fuel market and are competitively ordering ammonia carriers. Ammonia, which liquefies at minus 33 degrees Celsius, has a higher liquefaction point than propane (minus 42 degrees Celsius). But its toxicity needs thorough safety management.

Therefore, shipbuilders are actively developing technologies to prevent the corrosion of cargo holds and prevent leakage accidents. As ammonia-carrying ships can basically transport LPG as well, shipping companies prefer to order LPG-ammonia carriers over conventional LPG carriers, which leads to higher prices for LPG-ammonia carriers.

The market price of a 91,000-cubic-meter LPG carrier remained stagnant at around US$71 million until 2020, but rose to US$87.5 million in 2021 and US$95.5 million in 2022. Then, last year, it crossed US$100 million and rose to US$113.5 million. As of the end of March this year, it was US$117.5 million, which was US$4 million higher than the end of 2023.
Source: Business Korea