As the shipbuilding industry enters a super-boom phase, China-bound exports by Korea's ship engine manufacturers are increasing. The trend is expected to continue this year.
According to trade statistics from the Korea International Trade Association on the 19th, Korea's exports of ship engines and parts to China last year totaled $1,286,020,000 (about 1.8945 trillion won), up 24% from a year earlier.
Compared with 2023 and 2022, this represents sharp increases of 54.8% and 144.7%, respectively. China's shipbuilding industry, which holds an overwhelming No. 1 position with 63% of global ship orders, is continuing to increase orders for Korean-made engines.
Following last year, orders for ship engines from China to Korean corporations are continuing this year as well. Hanwha Engine on the 14th signed a contract to supply ship engines worth 433.9 billion won with a Chinese shipowner.
HD Hyundai Marine Engine also on the 8th signed a ship engine supply contract worth 24.259 billion won with Jiangsu New Yangzi Shipbuilding, China's largest private shipyard, and on the 9th signed a ship engine supply contract worth 62.15 billion won with TSSE.
Chinese sales account for a large share of Korean engine manufacturers' revenue. Of Hanwha Engine's orders, which cover about three years' worth of volume, 47% were placed by Chinese shipyards. Of last year's third-quarter revenue of 258.2 billion won, 50.4 billion won, or 19.5%, came from China.
Orders from Chinese shipyards are expected to continue increasing. Orders for container ships stalled last year due to the impact of U.S. Trade Representative restrictions on the entry of Chinese vessels, but as the sanctions were deferred, orders are expected to rise again.
Engines widely used in container ships recently are dual-fuel engines (engines equipped with both heavy fuel oil and eco-friendly fuel and able to switch between them), a segment where Korean companies have an edge over China.
An industry official said, "Given the conservative nature of the industry, shipowners tend to prefer Korean-made engines with high technological reliability when ordering dual-fuel engines," adding, "If orders for container ships in China increase, it could benefit Korean companies."
Meanwhile, engine makers are also increasing eco-friendly investments amid the boom. Hanwha Engine late last year acquired SEAM, a Norwegian specialist in electric propulsion and power automation systems, for about 290 billion won.
HD Hyundai Heavy Industries in 2024 developed an eco-friendly ammonia dual-fuel engine. HD Hyundai Marine Engine also plans to maximize production efficiency by improving gas-engine production facilities, repairing aging facilities, and upgrading processes in preparation for a higher share of eco-friendly engines. Among dual-fuel engines, methanol and ammonia dual engines emit less carbon than the currently most widely used LNG (liquefied natural gas) dual engines.