Hanwha Ocean Co., South Korea’s third-largest shipbuilder, has bagged an order to build seven containerships, valued at about 2 trillion won ($1.4 billion), from Yang Ming Transport Corp., a Taiwanese shipping company.
According to Yang Ming’s news release on Thursday, its board approved the order of seven 15,000-TEU, or twenty-foot equipment unit, liquefied natural gas (LNG) dual-fuel container carriers from Hanwha Ocean.
Considering the current price of an LNG dual-fuel containership is estimated at about $225 million, Hanwha’s order is estimated at $1.57 billion in total.
These vessels will be delivered to Yang Ming in phases between 2028 and 2029, once their construction is completed.
A RARE CONTAINERSHIP ORDER FOR A KOREAN SHIPBUILDER
This is a rare containership order for a Korean shipbuilder, as Chinese shipbuilders dominates the global containership market with prices about 20% cheaper than those of their Korean rivals.
Chinese players accounted for 70% of global containership orders in 2024, up from 52% in 2022. Over the same period, Korean shipbuilders’ share fell to 16% from 32%.
Yang Ming is believed to have turned away from Chinese companies despite the price advantage, to avoid US new port fees targeting Chinese-built and Chinese-owned or operated vessels entering US ports.
Sources said Chinese shipbuilders did not even submit bids Yang Ming’s latest containership orders following the US action.
BOON TO HANWHA OCEAN
The latest order is expected to improve Hanwha Ocean’s profitability, considering that about one-third of its 30.4 trillion won order backlog as of last year consistas of low-margin contracts won by Daewoo Shipbuilding & Marine Engineering Co. (DSME).
Hanwha Group took over DSME for 2 trillion won in 2023 and rebranded it as Hanwha Ocean.
The price of an LNG dual-fuel container carrier is about 30% higher than that of a diesel-powered ship.
A shift in Hanwha Ocean’s business focus toward high-value-added ships, such as LNG carriers, has paid off with the latest order, said an official from the shipbuilding industry.
It swung to profit in 2024 for the first time in four years, driven by increased sales of high-value-added LNG carriers, the company announced in January.
The shipbuilder posted 237.9 billion won in operating profit last year, a turnaround from a loss of 196.5 billion won a year earlier. Its sales rose 45.5% to 10.78 trillion won from 7.4 trillion won the prior year.
Hanwha Ocean also builds warships.
Its revenue in the defense business, including specialty vessels, also surpassed 1 trillion won in 2024, with the division’s operating profit margin reaching 12%.
Hanwha Ocean is the only Korean company that has built submarines for the country’s Navy.
It has also lately strived to expand its presence in the vessel maintenance, repair and overhaul (MRO) business.
Hanwha Ocean shares inched down 0.4% to close at 80,400 won on Friday after a 3.5% gain in the previous session.
By Jin-Won Kim
jin1@hankyung.com
Sookyung Seo edited this article
