FOCUS -South Korean shipbuilders' lock on LNG tanker market to hold for years
South Korean shipyards have boxed out their Japanese rivals from the market for building large ships carrying liquefied natural gas (LNG), winning all of the orders for the next three years worth more than $9 billion.
Three South Korean yards - Daewoo Shipbuilding & Marine Engineering (DSME), Hyundai Heavy Industries and Samsung Heavy Industries - have won the more than 50 orders placed for new large-scale LNG tankers for delivery in the next three years, according to data from the companies and two tanker brokers.
The bulging orderbook illustrates the dominance the South Korean yards have achieved over their competitors, especially in Japan. It is also sign of how the companies have rebounded from a sector-wide slump only two years ago and how they are positioned to command the sector in the future.
“The demand for LNG carriers surged followed by increased global demand of LNG,” said Park Hyung-gun, vice president of DSME. “There is a bright outlook ahead for LNG demand and South Korean shipbuilders will be able to excel in the LNG market.”
Including floating LNG storage and support vessels, ship brokerage Braemar estimates South Korean yards have bagged 78 percent of all LNG-related orders this year, with just 14 percent and 8 percent going to Japan and China, respectively.
A set of data collected by another ship broker, who did not want to be identified, showed all of this year’s orders for large LNG tankers went to South Korea, at a combined value of over $9 billion.
The new ships will increase the global LNG fleet by around 10 percent. Dominating this segment is key for shipyards, as gas consumption outgrows that of other fuels such as oil or coal.
The South Korean shipbuilders have outperformed their Japanese competitors this year with the equities for all three Korean firms rising while the Japanese builders are either flat or down....MUCH MOREOne of the charts accompanying the story:
Shipbuilder stock price performance
