Korean Shipbuilders Enjoy Increases in Orders for LPG and LNG Carriers in Q1 2024

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While global ship orders in 2024 fell from 2023, orders for high-value-added ships such as liquefied natural gas (LNG) and liquefied petroleum gas (LPG) carriers are on the rise, bringing smiles to Korean shipbuilders.

According to Clarkson Research, a British shipbuilding and shipping market analyst, global orders for new ships totaled 353 in the first quarter of this year. This is a 24.2 percent decrease and a 5.9 percent drop in terms of CGT from 466 ships in the same period of 2023.

However, orders for LNG and LPG carriers inflated. LNG and LPG carriers are the main focus of Korean shipbuilders. Compared to the first quarter of 2023, orders for LPG and LNG carriers climbed by 176.3 percent and 50.3 percent, respectively, while orders for tankers jumped by 71.4 percent over the same period.

Orders for container ships and bulk carriers decreased by 57.0 percent and 51.6 percent, respectively. Container ships and bulk carriers are Chinese shipbuilders’ main focus.

Moods in the Korean, Chinese, and Japanese shipbuilding industries are quite mixed. The Korean shipbuilding industry saw a 32.9 percent increase in orders compared to the first quarter of 2023 while China a 0.7 percent increase and Japan an 89.7 percent decrease. Only Korean shipbuilders enjoyed an increase in orders.

Korea was the only country to see a significant increase in order shares. In the first quarter, Korean shipbuilders’ share on a CGT basis stood at 43.4 percent, up 12.6 percentage points from the same period of 2023. In the same period, China’s share inched up from 44.7 percent to 47.1 percent.

Some experts are cautiously predicting that Korea will overtake China for the top spot in global shipbuilding orders this year. This is because Korea has already surpassed China in terms of order value.

According to statistics from the Ministry of Trade, Industry and Energy, South Korean shipbuilders won US$13.6 billion in orders in the first quarter compared to US$12.6 billion for China in the same period. This is the first time in three years that Korean shipbuilders surpassed China in order value since the fourth quarter of 2021.

This was also the first time in three years that Korea shipbuilders surpassed China in order intake. HD Korea Shipbuilding & Offshore Engineering secured US$9.39 billion in orders through March, reaching 69.6 percent of its annual order target. Hanwha Ocean also won orders for LNG projects in Qatar, bringing its cumulative total to US$3.27 billion.

“LNG carrier orders are expected to continue in the second half of 2024 as there are still large LNG projects pending,” said a Korean shipbuilding industry official.

Source: Business Korea