South Korea’s shipbuilders, bolstered by extensive orderbooks, are set to prioritize high-value-added contracts in 2025 to improve profitability, with optimism for new orders remaining strong. Expectations are particularly high for liquefied natural gas (LNG) carriers and naval vessels, especially following U.S. President Donald Trump’s second inauguration.
On Jan. 6, HD Korea Shipbuilding & Offshore Engineering (HD KSOE) announced its 2025 order target of $18.05 billion (approximately 26.26 trillion won), marking a 33.7% increase from the previous year’s goal of $13.5 billion. The company reported $20.56 billion (29.91 trillion won) in orders for 2024, surpassing its target by 154.6%.
All HD KSOE subsidiaries have also raised their 2025 goals. HD Hyundai Heavy Industries (HD HHI) aims for $9.75 billion (14.18 trillion won), a 35% increase from last year’s target. HD Hyundai Mipo set its sights on $3.8 billion (5.53 trillion won), up 45%, while HD Hyundai Samho raised its target by 18% to $4.5 billion (6.55 trillion won).
While global shipbuilding orders are forecast to decline this year, demand for eco-friendly, dual-fueled vessels is expected to grow, driven by stricter environmental regulations and the need to replace aging fleets. Last October, HD KSOE’s subsidiaries exceeded their annual targets, supported by steady demand for such ships. The company anticipates continued strong performance in 2025, particularly with methanol-fueled vessels, ammonia carriers, and LNG-methanol dual-fueled containerships.
Samsung Heavy Industries (SHI) is expected to announce its 2024 earnings and 2025 business objectives in February. Of the 36 vessels it secured last year, 31 were eco-friendly ships powered by alternative fuels, including LNG, ammonia, and ethane, reflecting a focus on high-value-added segments. SHI achieved 75% of its $9.7 billion target in 2024, securing $7.3 billion (10.62 trillion won) in orders. A delayed contract for a floating liquefied natural gas (FLNG) project off Mozambique’s coast impacted its performance. FLNG platforms are designed to operate offshore, handling gas exploration, extraction, liquefaction, transportation, and storage.
An SHI representative noted that the final contract for a second FLNG facility under the Coral Sul project was postponed due to local instability but is expected to close this year.
Hanwha Ocean, with an orderbook spanning three years, plans to prioritize profitability over volume by selectively pursuing contracts. The company is expanding its maintenance, repair, and overhaul (MRO) business for U.S. non-combat vessels and is expected to strengthen its defense-related portfolio. Hanwha Ocean secured $8.98 billion (13.07 trillion won) in orders for 2024, the highest among individual South Korean shipbuilders. Continuing its approach from last year, the company has chosen not to disclose its 2025 order target.
Demand for LNG carriers could rise further if the United States assembles a comprehensive energy package to implement during Trump’s administration. This could result in additional orders for South Korean shipbuilders, given the strong alliance between the two countries. Following his re-election in November, Trump reportedly discussed cooperation in naval ship MRO with South Korean President Yoon Suk-yeol. On Jan. 6, Trump mentioned the potential involvement of allied nations in naval ship construction, raising expectations for related contracts.
Source: The Chosun Daily
