South Korea's big three shipbuilders pass $30bn in first-half orders

South Korea's three largest shipbuilders have booked more than $30bn in orders in the first half of the year, with combined operating profit projected at around $3bn, in what local industry observers are calling the start of a super-cycle. The cumulative order value across the three yards reached just over $30bn so far this year, with the largest of them securing about two-thirds of its annual target, another meeting nearly three-quarters of its goal, and the third taking in an amount equivalent to half of its total for the whole of the previous year.

Second-quarter results are expected to be strong across the board, driven mainly by high-value vessel types such as liquefied natural gas carriers and very large crude carriers, alongside steadily rising ship prices. Analysts expect the momentum to continue into the second half, helped by large US LNG projects that should further boost demand for gas carriers, and the yards are also targeting US Navy maintenance, repair and overhaul work as a new growth engine. Securities analysts forecast that combined annual sales could approach $40bn this year, an all-time high.

The strength reflects a wider surge in newbuilding activity. Global shipbuilding orders in the first half reached almost 43m compensated gross tonnes across nearly 1,500 vessels, a two-thirds increase on the same period a year earlier, with South Korea capturing close to a fifth of the market by winning orders of about 8m compensated gross tonnes. Newbuilding prices, meanwhile, have continued to edge higher, standing roughly a third above their level of five years ago.