Korean shipbuilders account for nearly 70% of global LNG carrier orders

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

More than 70% of global LNG carrier orders have gone 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 was 5,444,931 CGT (63 ships) or 71% of the total, an increase of 280% from 1,433,562 GGT (17 ships) in the first half of 2021.

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

LNG carriers built by Chinese shipbuilders are not as reliable as those built by Korean shipbuilders. For example, the Gladstone LNG carrier built by Chinese shipbuilder Hudong-Zhonghua was taken out of service in 2018 due to engine failure in waters off Australia.

LNG carrier prices are on the rise, improving the profitability of Korean shipbuilders. The price of a 174,000 cubic meter LNG carrier was $186 million two years ago. But at the end of June 2022, it reached $231 million, up 24%.

However, soaring steel plate prices are bad news for Korean shipbuilders. Usually, steel plate prices are about 20% of shipbuilding cost. In the one-year period from the first half of last year, steel plate prices tripled. Currently, their price is 1.2 million won per ton, nearly double last year’s level.
Source: Korea Affairs