Korean Shipbuilders Benefits from Global Shift Due to U.S. Containment of Chinese Ships
HD Hyundai Heavy Industries is reportedly in final negotiations with Ocean Network Express (ONE), Japan’s largest shipping company, for a container ship supply contract worth 3.6 trillion won. Container ships were dominated by Chinese shipyards last year, with a market share of 86.6%. However, as France, Greece, Taiwan, and now Japan turn to Korean shipyards, attention is focused on whether Korea will reclaim the throne in the container ship market.
According to TradeWinds on May 23, HD Hyundai Heavy Industries is negotiating with ONE to secure orders for up to 12 16,000 TEU liquefied natural gas (LNG) dual-fuel (DF) container ships. Eight ships are likely to be confirmed orders, with four as options. The price per ship is $220 million (about 3.035 billion won), bringing the total order value to $2.64 billion (about 3.6 trillion won) for 12 ships. This is the largest order from a single shipping company since HD Korea Shipbuilding & Offshore Engineering received an order for 12 container ships (3.716 trillion won) from French shipping company CMA-CGM in January this year.
Global shipping companies are rushing to order LNG and methanol DF propulsion ships in response to stricter environmental regulations. As the United States strengthens its containment of Chinese ships by imposing entry fees, Korean shipyards with high technology in eco-friendly ship manufacturing are benefiting. An industry insider said, “Shipping companies have been ordering cheaper Chinese ships, but as problems such as defects arose, they are turning their eyes back to Korean shipyards.”
In fact, it is the first time since 2023 that a Japanese shipping company has ordered container ships from a Korean shipyard, making it particularly significant. ONE, Japan’s largest and the world’s sixth-largest shipping company, has been ordering ships from both Korean and Chinese shipyards, but China’s share in their order backlog reached 58%. The last time a Japanese shipping company entrusted container ships to Korea was when ONE ordered 10 13,800 TEU methanol DF container ships from HD Hyundai Heavy Industries in 2022-2023. Since 2024, Korean shipyards have not received a single order for Japanese container ships.
As Korean shipyards increase their orders for container ships in addition to LNG carriers, where they have an advantage over China, the momentum of the shipbuilding industry’s “super cycle” is growing stronger. The global market share of Korean shipyards for container ships rose from 11% last year to 29.7% in the first quarter of this year. China’s share fell from 86.6% to 58.1%.
Hanwha Ocean is also pursuing a container ship contract worth 1.8 trillion won with Germany’s Hapag-Lloyd. The three major Korean shipyards are likely to win orders for container ships worth 2.3 trillion won from Taiwanese shipping company Yang Ming.
The United States’ pursuit of rebuilding its shipbuilding industry and continuing large-scale commercial ship orders over the next decade is also expected to provide opportunities for Korean shipyards. The U.S. Congress recently introduced a bill to build about 250 ships in the United States by 2035 to form a strategic merchant fleet, with the key point being that ships built in countries like Korea will be recognized until 2030. Given that U.S. shipyards can build fewer than 10 ships annually, orders are expected to concentrate on Korean shipyards for the time being.
If this container ship contract is finalized, the new commercial ship orders for HD Korea Shipbuilding & Offshore Engineering’s three shipyards (HD Hyundai Heavy Industries, HD Hyundai Mipo, and HD Hyundai Samho) will exceed 12 trillion won this year. This already accounts for 62% of their annual target of $14.6 billion (about 20.15 trillion won). HD Korea Shipbuilding & Offshore Engineering also announced today that it has signed a contract with a European shipping company to build two 18,000-ton LNG bunkering vessels. The order value is 270.6 billion won, and HD Hyundai Mipo will build and deliver them sequentially by the second half of 2027.