Global orders for LNG carriers totaled 7,678,585 CGT (89 standard ships) in the first half of this year, according to Clarkson Research, a British shipbuilding and shipping market analysis agency. The figure represented a 416 percent increase from 148,6795 CGT or 18 standard ships in the first half of last year.

More than 70 percent of the global LNG carrier orders went to the three Korean shipbuilders — Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering (DSME). The trio’s combined order intake in the first half of the year amounted to 5,444,931 CGT (63 ships) or 71 percent of the total, an increase of 280 percent compared to 1,433,562 GGT (17 ships) in the first half of 2021.

The Korean shipbuilders’ stellar performance is attributed to their unrivaled technological prowess. LNG carriers store and transport LNG in cryogenic tanks at minus 163 degrees Celsius. If cryogenic LNG leaks out, it can break the ship into two parts. Japan once dominated the global shipbuilding industry, but is now placing orders for LNG carriers with Korean shipbuilders.

LNG carriers built by Chinese shipbuilders are not as reliable as those constructed by Korean shipbuilders. For example, the LNG carrier Gladstone built by China’s Hudong-Zhonghua Shipbuilding was decommissioned in 2018 due to an engine failure in waters off Australia.

LNG carrier prices are on the uptick, improving the profitability of Korean shipbuilders. The price of a 174,000-cubic-meter LNG carrier was US$186 million two years ago. But as of the end of June 2022, it hit US$231 million, up 24 percent.

However, soaring steel plate prices are bad news to Korean shipbuilders. Usually, steel plate prices accounts for about 20 percent of the shipbuilding cost. Over the one-year period from the first half of last year, steel plate prices increased three times. Currently, they are priced at 1.2 million won per ton, which is nearly twice the level of last year.

Source: Business Korea