The 2018 has been a better-than-expected year for South Korean shipbuilders, with an increase in new orders and especially in LNG ships, Yonhap reported citing industry sources. The combined new orders won by the shipyards in 2018 are almost up 20% compared with last year.
Over the recent years, the South Korean shipbuilding industry has been hit by an oversupply of vessels combined with low oil prices and a decrease in new orders in the last years, as a result from global economic downturn in 2008 and Chinese competition. In a bid to address the issue, the Republic of Korea has developed and implemented in recent years a range of measures to provide financial support to its shipbuilders.
Through 2018, a surge in orders for LNG ships and other commercial ships has enabled the country’s three major shipyards Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries, to almost meet their annual order targets:
- Hyundai Heavy has secured orders valued at $13.4 billion, surpassing 2018 target of $13.2 billion.
- Daewoo Shipbuilding secured over 90% of its annual order goal of $7.3 billion.
- Samsung Heavy met some 70% of its annual order target of $8.2 billion.
Their combined orders reached $8 billion and $19.8 billion, respectively, in 2016 and 2017, when they implemented harsh restructuring efforts.
The highlight of the year was LNG ships. The rise in demand for the gas in line with eco-friendly policies pursued by China and the proactive push for energy exports by the US has increased demand for LNG carriers, Yonhap reported. Orders for 65 carriers have been placed this year.
Except from this, South Korean shipbuilders clinched first position in new orders worldwide in the first 11 months of 2018, outpacing Chinese rivals, according to sources.
But some say it is too early to claim that the shipbuilding sector is on a full-fledged recovery as there are still few orders for high-priced offshore facilities, such as FPSO units.
