Wednesday, February 8, 2023
spot_img
HomeHeadlinesShipbuilding shares soar on Europe’s natural gas supply problem

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Shipbuilding shares soar on Europe’s natural gas supply problem

Korean shipbuilding companies saw their stock prices soar Wednesday, on growing expectations that they will receive more liquefied natural gas (LNG) ship orders, as Germany and other European countries are likely to import more gas by sea amid the escalating Russia-Ukraine military conflict, according to company officials and industry analysts.

Natural gas prices have been increasing sharply due to a series of negative factors, such as Germany’s decision Tuesday to halt the Nord Stream 2 Baltic Sea gas pipeline project, designed to supply natural gas directly from Russia to Germany.

Concerns have also been raised that Russia could stop its natural gas pipelines supplied to Europe through Ukraine. The analysts expect that European countries will move to import more LNG via ships to reduce their dependence on natural gas from Russia, which will increase demand for LNG carriers built by Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering (DSME) and Samsung Heavy Industries.

“Russia accounts for 16.5 percent of the world’s natural gas production, but its share in the LNG export market is only 8.3 percent. This is because a significant amount of natural gas is exported through pipelines. There is a possibility that European countries will strategically increase the proportion of LNG imports in the future,” Han Young-soo, an analyst at Samsung Securities, said in a recent report.

Han said that the Russia-Ukraine conflict seems to reflect expectations that European countries could ultimately expand the proportion of LNG delivered by ships made in Korean shipyards.

Spokesmen from local shipbuilders said that the Russia-Ukraine crisis will have no immediate impact on their business, given that the shipbuilding industry is structured around a multi-stage, long-term process, taking a year and a half to two and a half years to build a ship.
However, they expect that Korea’s shipbuilding companies will be able to benefit from the current crisis, as more countries will recognize the need for LNG carriers to stabilize the supply of natural gas.

“Theoretically, orders for LNG carriers to Korean shipbuilders could increase. Due to the Russia-Ukraine issue, the gas price will go up and then more LNG carriers will be needed. If that happens, Korean firms that are capable of manufacturing the world’s highest-quality LNG carriers will have more orders,” a DSME spokesman said.

However, he added that the shipbuilding business is not short-term like car manufacturing, so it is too early to conclude whether Korean companies could benefit.

A Hyundai Heavy spokesman also agreed that Korean shipbuilders may receive a significant increase in orders for LNG carriers, but added that it is difficult to make hasty conclusions.

“It takes a year and a half to two and a half years for shipbuilders to build a ship, so the shipbuilding industry is a business that requires long-term vision,” the spokesman said.

“As environmental regulations are tightened, companies are increasing their investments in developing eco-friendly ships and working hard to get more orders for LNG carriers. Moreover, a lot of investments are also being made in the ammonia hydrogen carrier business.”

On Wednesday, Hyundai Heavy shares closed at 109,500 won, up 7.35 percent from Tuesday. DSME shares ended at 27,000 won, up 21.9 percent, while Samsung Heavy shares closed at 5,930 won, up 6.65 percent.

Source: Korea Times

Related Posts

Video

Finance & Economy
Shipping News
Ports

Royal Caribbean set for record bookings after smaller loss

Royal Caribbean Group reported fourth quarter 2022 Loss per Share of $(1.96) and Adjusted Loss per Share of $(1.12). These results exceeded the company's...

Frontline: Emergency Arbitration claims initiated by Euronav fully dismissed

Frontline plc, formerly Frontline Ltd., announces that the Emergency Arbitration claims filed by Euronav have been fully dismissed by the Emergency Arbitrator. The decision was...

DP World reports solid volume performance in 2022

DP World Limited handled 79.0 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in full year 2022, with gross container...

LNG boosts CPLP 2022 results

Capital Product Partners L.P. released its financial results for the fourth quarter ended December 31, 2022. Highlights  Three-month periods ended December 31, 20222021Increase/(Decrease)Revenues$79.9 million$63.6 million26%Expenses$42.1 million$35.7...

Keppel Corp posts 9% drop in full-year profit

Singapore’s Keppel Corp said on Thursday its net profit for the year fell 9%, partly hurt by weak performance from its urban development business...

Royal Caribbean set for record bookings after smaller loss

Royal Caribbean Group reported fourth quarter 2022 Loss per Share of $(1.96) and Adjusted...

Baltic Index Extends Fall On Lower Rates For Panamax, Supramax

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index hits nearly three-year low on weaker vessel demand

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index hits over 2-year trough on waning demand for larger vessels

The Baltic Exchange’s dry bulk sea freight index dropped to its lowest level in...

Luxury Cruise Market Holds Much Promise For Greek & East Med Hidden Gem Destinations

The appeal of Greece and the East Mediterranean as an ideal region for luxury...

Clarkson Port Services acquires offshore renewable energy service provider, DHSS

Clarkson announced that its wholly owned subsidiary, Clarkson Port Services, has completed the acquisition of DHSS, a leading provider of integrated logistics services to...

DP World reports solid volume performance in 2022

DP World Limited handled 79.0 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in full year 2022, with gross container...

DP World wins bid for development of a mega-container terminal at India’s Deendayal Port

DP World has won a major concession to develop, operate and maintain the mega-container terminal at Deendayal port in Gujarat, on the western coast...

Luxury Cruise Market Holds Much Promise For Greek & East Med Hidden Gem Destinations

The appeal of Greece and the East Mediterranean as an ideal region for luxury cruising will be one of the main highlights of the...

Port of Los Angeles proposes cruise terminal project

The Port of Los Angeles is inviting comments on a draft Request for Proposals (RFP) for the future development of a new Outer Harbor...