China’s stringent environmental regulations as part of its efforts to reduce air pollution levels in its major cities is expected to surge demand for LNG carriers as a ship type, lifting prices of newbuildings, Hyundai Heavy Industries CEO Sam H. Ka was quoted as saying.
Namely, China’s environmental regulations have recently spurred a shift in imports of LNG, as a replacement to traditional coal, which seems to have triggered the restart of some gas projects in the US, Australia and Qatar, Mr. Sam H. Ka told Bloomberg. As such, slots for LNG-carrier construction at the booklog of the world’s largest shipbuilder are almost filled up until 2021.
Meanwhile, Mr. Ka added that this trend is most likely to benefit South Korea’s three biggest shipyards, Hyundai Heavy Industries, Samsung Heavy Industries and DSME -which are also the world’s largest- as gas carriers are the most expensive commercial ships and take the longest time to build.
The news comes at a time of an optimistic forecast for South Korean shipbuilders, who had been struggling for years amid global economic downturn and Chinese competition, but they eventually met their order targets in 2018 and took again the lead over China on global shipbuilding orders.
The three major shipbuilders, along with other smaller South Korean shipyards, won 94% of the 80 LNG carriers ordered worldwide last year, according to the country’s Ministry of Trade, Industry and Energy.
On the top of this, IMO’s 2020 sulphur cap is also expected to boost demand for LNG, as it is considered to be one of the available options for compliance with the regulation.
