DSME joins Korean peers to open another bumper year in vessel orders

Daewoo Shipbuilding & Marine Engineering Co. (DSME) became latest among Korean shipbuilding majors to extend the order winning streak from last year-end by landing its first 2021 order for two LPG carriers.

The South Korean shipbuilder bagged a 170 billion won ($154.4 million) order for two very large LPG carriers of 91,000-square-meter capacity from a Norwegian shipping company, according to industry sources on Tuesday.

The vessels would be delivered sequentially from late 2022 as soon as they are finished.

They would be mounted with an LPG-fueled dual engine and a shaft generator that would help save 5 to 7 tons of fuel a day.

Shares in DSME ended Wednesday down 1.46 percent at 27,050 won.

The new year has started off well for other local shipyards.

Korea Shipbuilding & Offshore Engineering Co. earlier this month received orders for six very large LNG-powered containers in the 15,000 TEU range from an Asian shipping firm in a deal worth 891 billion won. It went on to seal another 400-billion-won contract for an LNG carrier and very large crude carrier last week.

Samsung Heavy Industries Co. also kicked off the new year with a 199.3-billion-won order for an LNG carrier from PanOcean, a local shipping company.

Demand for LNG carriers is likely to stay robust on surging charter fees. The daily spot charter fee for a 160,000-square-meter LNG carrier jumped to $195,000 on Jan. 8 from $27,500 in July 2020, according to Clarksons Research, a U.K. data provider for the shipping industry.

“Orders are likely to stay strong early in the year,” said Lee Bong-jin, analyst at Hanwha Investment & Securities. “While the momentum could slow in the second quarter, vessel prices are expected to rise from the latter half,” he added.

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