S. Korean shipbuilders surpass annual targets on brisk new orders

South Korea's major shipbuilders have outpaced their annual order targets backed by brisk global new orders, company officials said Tuesday.

According to data provided by global market researcher Clarkson Research Service, global new orders for ships came to 37.54 million compensated gross tons (CGTs) in the January-September period, up nearly threefold from 13.22 million CGTs a year ago.

Compared with 10.53 million CGTs in the same period of 2016, when the shipbuilding industry was in a fierce slump, the global new orders rose 3.6 times.

The growth in the new orders stemmed from a surge in new orders for container carriers in the first nine months, which rose more than sixteenfold from the same period a year earlier.

"A surge in new orders for container carriers was attributable to shippers' preemptive preparation for environment regulations by the IMO," Yang Jong-seo, a researcher at the Korea Eximbank Overseas Economic Research Institute, told Yonhap News Agency by phone.

The International Maritime Organization (IMO) aims to cut carbon dioxide emissions from international shipping by more than 30 percent by 2025 and by at least 50 percent by 2050, compared with 2008.

Yang also said it will take two or three years for the shipbuilders to make profits from their recent remarkable new orders as most of the vessels will be delivered in two or three years.

Despite the recent strong new orders, the shipbuilders may see lackluster earnings until next year, he said, noting their lower-priced deals clinched between 2016 and 2020 due to heated competition could squeeze their margins.

Korea Shipbuilding & Offshore Engineering Co. (KSOE) has so far grabbed new orders for 204 ships worth $19.9 billion this year, surpassing its annual order target of $14.9 billion by 33 percent.

The ships include 66 container carriers, 12 very large crude carriers (VLCCs), five oil tankers, 36 petrochemical carriers, 29 liquefied natural gas (LNG) carriers and 49 liquefied petroleum gas (LPG) carriers.

KSOE, the subholding company of Hyundai Heavy Industries Holdings Co., operates three shipbuilders -- Hyundai Heavy Industries Co., Hyundai Samho Heavy Industries Co. and Hyundai Mipo Dockyard Co.

The country's second-largest shipbuilder, Daewoo Shipbuilding & Marine Engineering Co., won $8.58 billion in new orders for 46 ships this year, one wind turbine installation vessel (WTIV), one submarine and two offshore plants, which was up 11 percent from its annual order target of $7.7 billion.

The orders are for 20 containers, 11 VLCCs, nine LPG carriers and six LNG carriers.

Samsung Heavy Industries Co. obtained a combined $10.3 billion in orders this year, which exceeded its annual order target of $9.1 billion by 13 percent.

The shipbuilder received orders for 13 LNG carriers, 44 container carriers and 14 oil tankers.

In particular, South Korean shipbuilders, including the three major shipbuilders, showed their unrivaled competitiveness in the LNG carrier market in the January-September period.

They grabbed orders for 45 out of the 46 LNG carriers that were more than 140,000 cubic meters in size during the period, according to data by Clarkson Research Service. (Yonhap)