The combined market capitalization of HD Korea Shipbuilding & Offshore Engineering, Hanwha Ocean and Samsung Heavy Industries has more than doubled this year, reaching 92.1 trillion won (about $66 billion) as of Sept. 24, up from 37.9 trillion won at the start of the year, according to data from the Korea Exchange.
The 142 percent surge reflects mounting bets that the industry’s third super cycle could arrive well before the widely anticipated 2033 timeline.
Shipbuilding cycles typically recur every three decades, driven by the replacement of aging fleets. This time, however, the acceleration is being propelled by a rush of orders for liquefied natural gas carriers and floating LNG production facilities — vessels that command significantly higher margins than conventional cargo ships. Backlogs at South Korea’s top yards already stretch at least three years.
Samsung Heavy secured 2.1 trillion won in LNG carrier orders from an Oceania-based owner last month, while Hanwha Ocean signed a 350 billion won contract with a North American client in September.
Adding to the momentum is a proposed Korea-U.S. partnership, dubbed the “Make American Shipbuilding Great Again” initiative, or MASGA, which envisions sweeping investments in new American shipyards, joint workforce training and maintenance contracts pairing South Korean companies with U.S. personnel to service Navy vessels.
Hanwha Ocean has already announced $700 million in additional investment in its Philadelphia shipyard, aiming to boost annual production capacity from 1.5 vessels to more than 10 by 2035.
HD Korea Shipbuilding is preparing to merge two subsidiaries by year’s end to strengthen its naval capabilities, while Samsung Heavy has forged a strategic partnership with U.S.-based Vigor Marine Group.
Operating profits for the three builders surged 102 percent to 2.77 trillion won in the first half compared with a year earlier, underscoring the strength of the current upturn.
Still, uncertainties loom.
The MASGA plan faces hurdles, including stalled negotiations over a proposed $350 billion investment fund, questions about concrete U.S. vessel orders and potential shifts in American trade policy.
Recent immigration enforcement actions against Korean workers in Georgia have also complicated labor deployment, adding another layer of risk to an otherwise bullish outlook.
reporter
Kim Dong-young
davekim0807@ajupress.com
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