As U.S. liquefied natural gas (LNG) projects expand, orders for LNG carriers to transport it are expected to kick into full gear.
Han Seung-han, an SK Securities researcher, said this in a report on the 28th, maintaining an overweight investment opinion on the shipbuilding sector.
According to the researcher, as U.S. energy corporations Sempra made a final investment decision (FID) for Phase 2 of the Port Arthur LNG project, it was estimated that more than 20 LNG carriers would need to be newly built.
Woodside Energy is also setting the number of new LNG carriers needed for its Louisiana LNG project in the United States at a minimum of 16 and up to 20. In particular, it is known to be excluding Chinese shipyards and discussing related order volumes with Korean shipyards.
The researcher said, "Full-fledged ordering for North American LNG carriers has begun," and added, "Going forward, the share of LNG carrier construction reflecting the full market price, without the (relatively low-priced) Qatar volumes, will increase, and the profit improvement trend is expected to be maintained."
A boost is also the support from five U.S. unions, including the United Steelworkers, for the Ships Act, along with a call for swift passage. On Apr. 4, Democrats and Republicans jointly reintroduced the Ships Act, which includes increasing the number of vessels used for international transport within the Strategic Sealift Fleet (SCF) from 96 to 250.
In particular, unlike the Ships Act introduced last year, the currently introduced version specifies that if the U.S. Transportation Command (TRANSCOM) confirms a shortage of tankers (oil tankers), the U.S. Maritime Administration (MARAD) will prioritize incorporating tankers.
The researcher said, "Because U.S.-flagged ships have to pass through the Panama Canal, they are mainly composed of mid-sized vessels," and added, "Therefore, HD Hyundai Mipo, which ranks No. 1 in building capacity for medium-range petrochemical product carriers (PC ships), is expected to benefit the most from the Strategic Sealift Fleet."
He continued, "In the mid to long term, we expect Hanwha Group, which owns a shipyard in the United States, to benefit," adding, "Starting in 2031, it will be impossible to incorporate ships built at overseas shipyards into the Strategic Sealift Fleet, and all provisions related to tax benefits and incentives are conditioned on 'built in the United States.'"
The researcher also predicted that, in the long term, if HD Hyundai Group and Samsung Heavy Industries secure shipyards in the United States, they could enjoy related momentum (share price drivers).