In 2020, the three major Korean shipbuilders received $20.9 billion in orders for the year, with nearly two-thirds of them finalized in the fourth quarter. With the last quarter of the outbreak, South Korea's shipbuilding industry in 2020 business orders to achieve a better than expected performance, and LNG ships and high value-added ship orders have become the key to the "resurrection" of the South Korean shipbuilding industry.
Breaking the "receiving barrier", South Korea received orders in the fourth quarter of last year accounted for two-thirds of the annual amount
According to statistics, South Korea shipbuilding "three giants" Hyundai Heavy Industries Group, Daewoo Shipbuilding, Samsung Heavy Industries in 2020 to undertake the annual amount of new ship orders totaling 23 trillion won (about 20.9 billion U.S. dollars), the amount of new ship orders in hand at the end of 2020 totaled about 70 trillion won (about 63.2 billion U.S. dollars), although compared to 2019 Although it is about US$10 billion less than the US$73 billion at the end of 2019, it at least ensures the amount of work material for this year and next year, laying a solid foundation for production in the next two years.
South Korea's JoongAng Daily reported on Jan. 3 that the Big Three shipbuilders received 15 trillion won (about $13.9 billion) in orders in the fourth quarter of last year alone. Considering that Korean shipbuilders had been facing a "drought in order intake" by the end of the third quarter of last year due to the impact of the new crown pneumonia epidemic, with orders received in the first three quarters totaling only about $7 billion, while the amount of orders received in the three months of the fourth quarter was twice this figure, the Korean shipbuilding industry can be said to have achieved a "dramatic turnaround" in 2020. "dramatic reversal".
Specifically, Hyundai Heavy Industries Group is responsible for shipbuilding business of the secondary holding company Korea Shipbuilding Marine in the fourth quarter of last year to undertake 6 trillion won (about 5.5 billion U.S. dollars) of orders, accounting for 55% of the annual amount of orders received; Samsung Heavy Industries in the fourth quarter of last year to undertake 5 trillion won (about 4.5 billion U.S. dollars) of orders, accounting for 82% of the annual amount of orders received; Daewoo Shipbuilding in the fourth quarter of last year to undertake 4 Daewoo Shipbuilding received 4 trillion won (about 3.9 billion U.S. dollars) of orders in the fourth quarter of last year, accounting for 72% of the annual amount of orders received. It can be said that the three major Korean shipbuilders have successfully broken the "order taking barrier".
The Korean shipbuilding industry is facing great difficulties after the outbreak of the international financial crisis due to factors such as reduced global demand and increased market competition. In the extremely difficult year of 2020, it is rare for the three major Korean shipbuilders to achieve such order acceptance results, which is the "resurrection flare" launched by the Korean shipbuilding industry, and the industry is looking forward to the bottoming out of the Korean shipbuilding industry.
The Korean shipbuilding industry, led by the "Big Three", plans to expand the scope of orders to crude oil carriers, container ships, and other fields to further expand the global market, using the LNG-powered shipbuilding technology with strong international competitiveness as a lever.
Korea's advantage in the field of high value-added vessels remains as it sweeps the LNG vessel market
The driving force behind the Korean shipbuilding industry's impressive order intake performance in the fourth quarter of last year remains its biggest strength, LNG vessels. 174,000 cubic meters or more of large LNG vessels cost about 200 billion won to build and are high value-added vessels. In this field, South Korea will still be the only player in 2020.
According to Clarkson's statistics, South Korea accounted for more than 80% of the large LNG vessels ordered worldwide from January to November last year. Considering that Korean shipbuilders took a large number of LNG ship orders in December last year, the market share is expected to reach more than 90% for the whole year.
Not only in the field of LNG vessels, but also in the field of large container ships and VLCCs, the orders received by Korean shipbuilders have been increasing, which is encouraging to the Korean industry.
It is understood that Korean shipbuilders are promoting the conversion of these vessels to environmentally friendly vessels equipped with LNG dual-fuel power units, and are competing for orders in this way. As the World Maritime Organization (IMO) and the European Union (EU) continue to strengthen new environmental regulations, global shipping companies are increasingly concerned about LNG dual-fuel-powered vessels. In this field, the technical capability of Korean shipbuilders is evaluated as the highest by the global industry. Last month, Daewoo Shipbuilding signed a Letter of Intent (LOI) for the construction of 10 LNG dual-fuel-powered VLCCs with ship owners in Europe.
Looking ahead to 2021, the biggest focus of attention in the global shipbuilding community is when the formal contract for the construction of LNG vessels for the Qatar project will be signed. The Korean industry believes that Qatar National Petroleum (QP) will order LNG carriers on a large scale this year. On June 1 last year, the three major Korean shipbuilders have signed a memorandum of agreement (MOA) with QP for the construction of LNG vessels amounting to 23.6 trillion won, according to which the three major Korean shipbuilders will reserve most of their LNG carrier construction capacity for QP until 2027 to meet the demand of its future LNG carrier fleet.
NH Investment Securities researcher Choi Jin-ming said, "The market is expected to release 40-60 orders for LNG carriers by the second quarter of this year, while orders for bulk carriers, tankers and other vessel types will also enter the normalization track after the third quarter."
According to the "Outlook for Korea's Main Industries in 2021" released by the Korea Industrial Research Institute at the end of last month, it is predicted that in 2021, the export value of Korea's shipbuilding industry will increase by 2.2% over 2020 to reach $20.2 billion. In particular, ship exports, the delivery of which was delayed last year due to the New Crown Pneumonia epidemic, are concentrated in the first half of this year, and the export value of Korea's shipbuilding industry is expected to increase by 6.7% in the first half of this year. In addition, total shipbuilding completions in South Korea are expected to reach 9.67 million revised gross tons (CGT) this year, up 10.8% from last year's 8.73 million CGT.
