Korean Shipbuilders Top Chinese in January After Return to Profits in 2024
The rivalry between China and South Korea’s shipbuilders continues to heat up. While there is growing concern due to China’s apparent domination of the market, South Korea’s shipbuilders achieved strong results in 2024 and continue to carve out the high-end market.
After posting a dismal new order performance in December booking only six percent of new orders versus 82 percent by the Chinese shipbuilders, South Korea’s industry rebounded to the leadership position in January 2025. It is the first time in several months South Korea received the largest percentage of new orders and it also demonstrated the success of the industry’s focus on higher-value projects and ships.
According to data from Clarkson Research the South Korean industry booked 62 percent of the global orders in January based on tonnage. It received orders for 900,000 CGT (compensated gross tons). That compared with the Chinese yards which received just 19 percent of the tonnage ordered or 270,000 CGT.
South Korea’s orders were led by 12 LNG carriers booked at HD Korean Shipbuilding & Offshore Engineering as well as an LNG carrier order for Samsung Heavy Industries. In addition to being higher-value orders, they are also large vessels. South Korea’s orders were for 13 vessels compared to 21 smaller, lower-value vessels ordered from Chinese shipbuilders in January.
China continues to still dominate the overall orderbook with a backlog of 91.51 million CGT or 58 percent of the vessels (by tonnage) on order. South Korea has 24 percent of the orders (by tonnage) or a total of just over 37 million CGT. Veson released a market analysis this week with its VesselsValue data highlighting that Chinese shipowners committed to $123 billion in newbuild orders in 2024. The orders were mostly for tankers followed by bulkers and then containerships. Chinese yards have just begun to break into the international market for LNG and other gas carriers.
South Korea’s companies have a positive outlook for 2025 with HD KSOE reporting it increased its forecast by 30 percent versus its 2024 target. It however represents a decline from the actual orders booked in 2024. Samsung Heavy Industries has not yet reported 2024 results and its forecast but commented that its outlook is slightly higher than last year. Hanwha Ocean has commented that it anticipates stable growth in 2025.
The positive outlook among the South Korean shipbuilders was in part driven by the strong financial performance recorded in 2024. Ship prices were approaching two-decade highs further contributing to the profitability of the sector.
HD Hyundai Heavy Industry reported an overall nearly 50 percent increase in operating profit with a better than 10 percent increase in consolidated revenues for 2024. Specifically, within shipbuilding, HD Korea Shipbuilding and Offshore Engineering (KSOE) saw profits jump 400 percent to a profit of more than $960 million. Sales were up 20 percent to $17.5 billion.
Hanwha Ocean continued the turnaround from the former Daewoo Shipbuilding (DSME) achieving its first profitable year since 2020. It reported sales of nearly $7.5 billion with an operating profit of $166 million.
The return to profitability was not limited to South Korea’s largest shipbuilders. Mid-sized HJ Shipbuilding reported an annual profit of $6.3 million. This was achieved despite a nearly 13 percent decline in revenues.
The Korean shipbuilders are refining their business strategy. KSOE for example continues to increase its focus on green technologies and automation while also booking orders for LNG carriers. The company plans to make its first bid next month for a U.S. Navy-related repair contract and is targeting two to three contracts in 2025. Hanwha Ocean won the first two U.S. Navy contracts in 2024 for repairs to an MSC dry cargo and ammunition ship and then an oiler. Hanwha is targeting six USN MRO contracts for 2025 in addition to the construction of LNG carriers, submarines, and LNG dual-fuel containerships.
HD Heavy Industries and Hanwha Ocean reportedly have reached a partnership agreement for the export of naval ships as they continue to seek more international work. The companies were also encouraged by building relationships with the U.S. Navy in 2024 which Donald Trump has signaled he supports. Trump has said the U.S. could use the capabilities of the South Korean shipbuilders as he pursues a buildout for the U.S. Navy.