Shipbuilding stocks gain U.S. calls for Chinese sanctions

[Courtesy of HD Korea Shipbuilding & Offshore Engineering Co.]

South Korea’s shipbuilding sector experienced a rally in early trading on Friday. The uptick comes after reports of a petition filed with the U.S. government urging sanctions against Chinese shipbuilders and shipping firms, a move the market expects will bring potential benefits to Korean shipbuilders.

HD Korea Shipbuilding & Offshore Engineering Co was trading at 123,100 won ($92) per share as of 9:46 a.m. on Friday, up 3.8 percent from the previous trading day.

Hyundai Mipo Dockyard Co. and Hanwha Ocean were also among the top gainers.

The United Steelworkers (USW) union asked U.S. President Joe Biden to open a trade probe into alleged Chinese unfair economic practices in the shipbuilding and maritime logistics sectors on Tuesday.

The USW and other trade unions filed a petition with the U.S. government outlining the alleged discriminatory practices that have helped China dominate global shipbuilding.

The U.S. authority has 45 days to decide whether to respond by opening a probe, and Biden says the government will take a hard look at the petition in accordance with the law.

“The U.S. government is highly likely to respond to the call, given ahead of months of a presidential election in November, and further progress will be important” at N.H. Investment & Securities Co. analyst Jung Yeon-seung said.