South Korea’s three major shipbuilders—HD Hyundai Heavy Industries (HD HHI), Hanwha Ocean, and Samsung Heavy Industries (SHI)—have secured containership orders worth 11.5 trillion won (approximately $8.3 billion) in the global market so far this year. With 52 vessels booked in less than six months, the total value of new contracts has already exceeded the full-year figure for 2023, which stood at 10 trillion won ($7.2 billion) for 45 ships. Industry insiders are calling it a “rediscovery of the containership.”
Until recently, containerships were not a strategic focus for South Korean yards. The sector required no particularly advanced technology, and cutthroat price competition from Chinese shipbuilders made the market largely unattractive. Compared to liquefied natural gas (LNG) carriers—the cornerstone of South Korea’s shipbuilding exports—containerships commanded lower prices and were often viewed as an inefficient use of valuable dock space.
Chinese shipbuilders largely dominated the market under those conditions. But that dynamic has shifted, driven by growing demand for environmentally compliant vessels. The value of containerships has risen as the International Maritime Organization (IMO) implements stricter environmental regulations. For example, the IMO now requires greenhouse gas emissions from vessels to be reduced to 80 percent of 2008 levels by 2030. Facing the risk of heavy penalties, shipping companies are replacing older fleets with higher-cost, eco-friendly alternatives.
In some cases, ultra-large containerships equipped with green technology and capable of carrying around 20,000 twenty-foot equivalent units (TEUs) are now priced on par with high-value LNG carriers. This price convergence has prompted South Korean builders to re-enter the containership market with renewed competitiveness.
On June. 10, HD Korea Shipbuilding & Offshore Engineering (HD KSOE), the intermediate shipbuilding holding company under HD Hyundai, announced a 1.4 trillion won ($1.8 billion) contract to construct eight 15,900-TEU containerships. Year to date, HD Hyundai-affiliated shipyards have secured orders for 44 containerships, 26 of which—59 percent—are dual-fuel vessels capable of operating on conventional heavy fuel oil as well as alternative green fuels such as LNG, ammonia, or methanol. These ships are also being outfitted with a range of carbon-reducing systems, including exhaust gas heat recovery units that recycle waste heat into usable energy. The integration of such equipment is contributing to a steady increase in overall ship prices.
According to maritime intelligence firm Clarksons Research, the average price of newly built containerships in the 22,000 to 24,000 TEU range surged from $145 million in May 2020 to $273.5 million last month—a jump of roughly 89 percent. During the same period, LNG carrier prices rose from $186 million to $255 million, reflecting a slower rate of increase. In relative terms, containership prices have climbed more sharply.
“When it comes to ultra-large, dual-fuel containerships, we’re still viewed as being ahead of China in terms of technological capabilities,” a South Korean shipbuilder representative said. “And with prices now approaching those of LNG carriers, this segment has become a competitive battleground.”
External factors are also influencing the market. As global cargo volumes rebound in the post-pandemic period, containership demand and prices have surged. At the same time, U.S. policy measures targeting Chinese shipbuilding dominance are reshaping industry dynamics. In April, the U.S. government announced a new port fee of $50 per net ton (NT) for vessels built or owned by Chinese firms, effective Oct. 14. These fees are set to rise incrementally through 2028.
With Chinese shipyards currently responsible for an estimated 70 to 80 percent of global containership production, market analysts suggest that the expected decline in Chinese-built supply is already being factored into global pricing trends.
Source: The Chosun Daily
