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Korean Shipbuilding Industry Pinning High Hopes on LNG Tankers
LNG Carriers Expected to Buoy Shipbuilding Market
Korean Shipbuilding Industry Pinning High Hopes on LNG Tankers
  • By Jung Min-hee
  • January 2, 2019, 10:04
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Korean shipbuilders count on LNG tankers for sales growth this year.

Korean shipbuilders are pinning high hopes on LNG carriers this year as well. Demand for LNG tankers has been on a steady rise as major countries have toughened environmental regulations as part of their eco-friendly energy policies.

Shipbuilding analysts say LNG tankers will continue to buoy the world shipbuilding market as they did last year. According to Clarkson Research, a shipbuilding and marine analysis agency in the U.K., LNG carrier orders in the world totaled 65 units last year, up from 17 in the previous year. This year's order volume is expected to increase to 69 units, and 63 LNG carriers are expected to be ordered on average annually from 2020 to 2027.

"Governments around the world are encouraging the use of LNG as a fuel in all industries to minimize pollution," a shipbuilding industry official said. "This has increased global LNG trade volume, raising the freight rates of LNG carriers."

Thanks to the boom in the LNG tanker market, Korea’s three major shipbuilders, which enjoy unrivaled technological competitiveness in this field, could attain their order targets last year. Hyundai Heavy Industries Group surpassed its target of US$13.3 billion and Daewoo Shipbuilding & Marine Engineering (DSME) posted US$6.81 billion in new orders, more than its target of US$6.6 billion. Samsung Heavy Industries also attained US$6.3 billion, surpassing its target of US$5.1 billion.

However, the three shipbuilders’ offshore plant businesses, which have shrunken in recent years, are expected to go through a dilatory recovery this year, too, as global oil prices are forecast to drop this year, hampering global oil majors’ investment in oil exploration and production equipment.