As it approaches a month since war broke out between the United States and Israel and Iran, the order books of Korea's shipbuilders show no signs of being hit. Some even said contracts are being concluded faster than before, unlike in the past when shipowners tended to delay newbuild orders as uncertainty grew.
According to the shipbuilding industry on the 26th, global shipowners have recently been wrapping up construction contract talks with Korean shipbuilders at a faster pace than before and continuing to place orders. According to Clarksons Research and the shipbuilding industry, major domestic shipbuilders (HD Hyundai Heavy Industries, Hanwha Ocean, Samsung Heavy Industries, HD Hyundai Samho) won orders for a total of 19 vessels over the 25 days from the 28th of last month, when the United States and Israel first struck Iran, through the present. That is nearly five times the four vessels in February, right before the war. The figures are close to or have surpassed March last year (20 vessels) and March 2024 (16 vessels).
A shipbuilding industry official said, "Uncertainty has grown due to the war in the Middle East, but there have been no cases where newbuild contract talks were postponed or orders were delayed," adding, "According to working-level staff, it was common for the other side to drag out deals under the pretext of negotiations, but recently, the mood is rather to hurry and wrap up contracts."
Given the heightened uncertainty from the war, the faster contracting pace feels even more pronounced, industry officials said. When uncertainty rises, shipowners typically delay new investment decisions, including for ship orders. Another official said, "There are often tug-of-wars over options, prices, and other terms, but as uncertainty has grown so much, the mood is that contracts are actually proceeding more smoothly."
In general, investment sentiment weakens when geopolitical tensions persist. As cargo volume becomes more volatile and demand forecasting grows harder, shipowners delay and wait. Global newbuild orders in the early part of last year (January to April), when geopolitical uncertainty was high due to U.S. regulations and tariffs on Chinese ships, totaled 439 vessels, a drop of more than half compared with 980 vessels in the same period in 2024.
Environmental regulations also heighten uncertainty and affect orders by shipping companies. In October last year, the International Maritime Organization (IMO) postponed discussions on introducing a carbon tax by a year, increasing uncertainty for shipyards' order books. A shipping company official said, "Container ships, which consume a lot of fuel and make up a large share of fleets, are heavily affected by environmental rules," adding, "We have to decide between the benefits of expanding the fleet with newbuilds and the expense involved, but if the rules are not finalized, all we can do is wait."
The impact of war is even greater. That is because there are more variables to consider, including difficulty forecasting cargo volumes, raw material price volatility, potential route changes, and the possibility of additional sanctions.
Even so, industry officials said shipowners are moving up order decisions due to price volatility and delayed delivery timelines. With secondhand prices for almost all ship types rising and no one knowing when the ship new building price might climb, shipowners are rushing to place orders.
There is also a hedging aspect in case the war drags on. If a ship has to be ordered anyway, ordering even a bit earlier rather than delaying increases the chance of taking delivery when it is needed.
There are reportedly cases of orders being placed to store energy produced in the Middle East. Even though the Strait of Hormuz has been effectively blocked, shutting a supply route, production continues, and ships are sometimes used to store energy for a certain period.
An industry official said, "If production stops, fixed costs such as restart expense are high, so tankers and other vessels are sometimes used for stockpiling," adding, "With shipyard slots (construction space) tight, it can be seen that orders are proceeding quickly."