The big three Korean shipbuilders -- HD Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries, and Hanwha Ocean -- are expected to lower their annual order targets for 2024 compared to last year, according to BusinessKorea.
According to a recent industry report, HD Hyundai’s shipbuilding intermediate holding company, Korea Shipbuilding & Offshore Engineering, has set US$13.5 billion as its annual order intake target for 2024. This is a 14.2 percent decrease from last year’s. By subsidiary, HD Hyundai Heavy Industries is targeting US$9.28 billion, Hyundai Samho Heavy Industries US$3.2 billion, and Hyundai Mipo Dockyard US$3.1 billion, down by 38.1 percent, 52 percent and 16.8 percent year on year, respectively.
Samsung Heavy Industries is also expected to set a lower annual order target. Last year, the shipbuilder ended a nine-year losing streak that began in 2015 and returned to profitability. This is explained by its strategy of selectively ordering high-value vessels to boost its earnings. It is also likely to be influenced by the fact that Samsung Heavy Industries did not achieve its target of US$95 last year. The company reached only 87 percent of its 2023 order target.
Hanwha Ocean is also expected to lower its order intake target from last year’s. Last year, Hanwha Ocean achieved 57 percent of its order goal of US$6.98 billion. The company explained that the lower achievement rate compared to last year’s target was due to the fact that it was already fully booked and only selected high-value vessels. However, Hanwha Ocean will not disclose its internally set order target for 2024 in order to avoid unnecessary competition for orders and boost its profitability.
Global ship orders are also expected to be lower in 2024 than last year. According to the Export-Import Bank of Korea’s Overseas Economic Research Institute, the global shipbuilding market is expected to receive shipbuilding orders for 29 million CGT this year, down 24.7 percent from 2023. Some experts have raised concerns that the global newbuilding market may be peaking as shipbuilding orders continue to fall.
According to Clarkson Research, a U.K.-based shipbuilding and maritime market specialist, global ship orders have been on the wane with 56.81 million CGT in 2021, 51.14 million CGT in 2022, and 42.16 million CGT in 2023.