Samsung Heavy Industries and Hanwha Ocean recently secured shipbuilding contracts worth 5 trillion won over the past two days. As the U.S. government under Donald Trump heightens its efforts to contain the Chinese shipbuilding and shipping industry, orders are continuing to flow to South Korean shipbuilders.
According to the shipbuilding industry on the 19th, Samsung Heavy Industries signed a shipbuilding contract worth 2.4 trillion won on the 17th and 18th. On the 17th, the company secured nine shuttle tankers (crude oil carriers) worth 1.9355 trillion won from an Oceania-based owner, followed by an additional two very large ethane carriers (VLEC) worth 466.1 billion won from an Asian owner on the 18th.
The company that ordered the shuttle tankers is Greece's Chacos Energy Navigation. Samsung Heavy Industries plans to build nine Suezmax-class shuttle tankers (the largest size ship that can pass through the Suez Canal) and deliver them sequentially by the end of 2028. While there were speculations that Korean and Chinese companies like COSCO Shipping Heavy Industry might share the orders, Samsung Heavy Industries secured the entire quantity. The ethane carriers are ordered by Japan's Mitsui O.S.K. Lines and will be equipped with dual-fuel engines for ethane.
As the string of orders continues, Samsung Heavy Industries has filled 19% of its order target for this year (approximately $9.8 billion). A representative of Samsung Heavy Industries noted, "We are building our order portfolio focused on high value-added ships."
Hanwha Ocean secured six ultra-large container ships worth 2.3286 trillion won from Taiwan's Evergreen on the 17th. These are liquefied natural gas (LNG) dual-fuel powered vessels with a capacity of 24,000 TEU (one TEU is one 6-meter container). Measuring 400 meters in length and 61.5 meters in width, they can transport 24,000 containers at once. Evergreen is one of the world's largest container shipping companies, operating a fleet of over 200 vessels, and this is the first time it has chosen Hanwha Ocean.
In the shipbuilding industry, there is significant meaning attributed to the fact that domestic shipbuilders have secured ultra-large container ships, surpassing China. Since the building technology for container ships has been standardized, Chinese shipbuilders had previously dominated orders by offering lower prices. Hanwha Ocean is also being considered a candidate to build 13 LNG dual-fuel container ships to be ordered by Taiwan's Yang Ming Marine Transport.
Domestic shipbuilders are enhancing their competitiveness with eco-friendly advanced technologies in response to China's pricing pressure. The LNG dual-fuel container ships ordered by Hanwha Ocean will be equipped with an Air Lubrication System (ALS), a Shaft Generator Motor (SGM), and other eco-friendly technologies.
There are high expectations in the shipbuilding industry that South Korean shipbuilders will benefit from the U.S. government's policy of containing the Chinese shipbuilding industry. In January, the U.S. Department of Defense designated the China State Shipbuilding Corporation (CSSC) as a Chinese military enterprise. Corporations that conduct transactions with the U.S. Department of Defense must cease transactions with CSSC by June of next year.
The U.S. Trade Representative is moving forward with a plan to impose fees on shipping companies that order vessels from Chinese shipbuilders or use Chinese-made ships when entering U.S. ports. A public hearing on this matter is set to be held on the 24th. Should actual port fees be implemented, there are observations that order volumes may increase for South Korean or Japanese shipbuilders depending on the expense burden.