S. Korea's shipbuilding maintains world top post in 2020

Korea outruns China with last-minute LNG carrier orders, foresees uptrend in 2021 amid growing calls for eco-friendly ships

(Yonhap)

Despite the extensive fallout of the COVID-19 pandemic, South Korea’s shipbuilding industry maintained its top spot in the world in order volume last year, outrunning China with a last-minute clinching, data showed Tuesday.

According to UK-based global shipping information provider Clarksons Research, the total amount for shipbuilding contracts across the world came to 17.92 million compensated gross tonnage as of Dec. 28.

Of the sum, China and South Korea respectively accounted for 7.98 million CGT and 6.73 CGT, taking first and second place.

But the latest statistics, industry officials pointed out, did not include the liquefied natural gas carrier contracts signed by Korea Shipbuilding & Offshore Engineering and Samsung Heavy Industries during the final week of the year.

With the additional 1.45 CGT, Asia’s fourth-largest economy prolonged its top position in the global market for three years straight.

By end-June last year, China had taken a visible stride ahead, logging 3.51 CGT in accumulated order amount, while Korean shipbuilders had only secured 1.18 CGT during the same period.

Turning the table in favor of Korea were a series of high-value-added orders -- LNG carriers, very large crude oil carriers and container ships -- in the fourth quarter.

The Korean shipbuilding business is looking ahead to a relatively prosperous year, as the market’s potential demands are expected to pick up momentum this year after the initial pandemic crisis stage. The increasing level of environmental regulations across the world are also likely to spur major shipowners to replace their timeworn vessels.

Backing such speculation is the incoming Joe Biden administration in the United States, which has been observed to prioritize environmental protective policies, in contrast from the Donald Trump administration. The Emissions Trading System adopted by the European Union will also boost demand for newly built eco-friendly ships.

“The rising calls for eco-friendly ships is a favorable trend for Korean shipbuilders who are still unrivalled in high-tech, special purpose vessels,” said an official.

“We expect that shipbuilding orders will be placed en masse during the early months of this year, especially to make up for the losses made during the peak of the COVID-19 crisis last year.”

Meanwhile, market top player KSOE said Tuesday that it scored a 900 billion-won ($828 million) order to build six container ships for an Asian shipper by 2023.

The state-run Export-Import Bank of Korea predicted in its industrial outlook report last month that the country’s shipbuilding industry will log $21.5 billion in total orders this year, up 110 percent from a year earlier. As the given amount excluded offshore plants, the actual comprehensive figure may rise further, officials said.

KSOE currently manages three shipbuilding units -- Hyundai Heavy Industries, Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries.

By Bae Hyun-jung (tellme@heraldcorp.com)

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