HD Korea Shipbuilding & Offshore Engineering Co. (HD KSOE), the intermediate holding company of HD Hyundai Group, has achieved an unprecedented feat by surpassing more than half of its annual order target within just two months this year.

The surge in orders is attributed to shipping companies expediting vessel orders, concerned about potential price hikes in the shipbuilding market due to selective ordering by global shipyards.

HD KSOE has signed contracts for the construction of a total of 58 vessels as of Tuesday, including one offshore facility, accumulating an order value of $7.16 billion.

This amount constitutes 53 percent of its annual order target of $13.5 billion for 2024.

By vessel type, the orders include six LNG carriers, 21 petrochemical carriers (PC), 21 liquefied petroleum gas (LPG) and ammonia carriers, one ethane carrier, two liquefied carbon dioxide (CO2) carriers, two very large crude carriers (VLCC), two Suezmax tankers, two pure car and truck carriers (PCTC), and one offshore facility.

The performance for the week from February 24 to March 1 alone boasts an impressive 14 vessels worth about 2.72 trillion won ($2.03 billion).

The pace of order acquisition by HD KSOE this year is exceptional compared to its performance over the last three years.

The order target achievement rate was 38.8 percent by the end of February 2023. It was 22.7 percent in 2021 and 29 percent in 2022.

The strong performance is set against the backdrop of a seller’s market in the shipbuilding industry.

The three major Korean shipyards ? HD KSOE, Samsung Heavy Industries, and Hanwha Ocean ? have been accumulating a backlog of orders for three to four years, focusing on selective high-value vessel orders.

This has led shipping companies to expedite their vessel orders, anticipating potential further increases in ship prices.

Additionally, the recovery in tanker orders, which had been sluggish for some time, has also played a role.

Particularly notable is the revival of very large crude carrier (VLCC) orders. China has been aggressively entering this market segment by leveraging its price competitiveness.

By Choi Hyun-jae and Minu Kim

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]