Samsung Heavy Industries, Hanwha Ocean might miss their annual order targets

Based on the current order data, only HD Hyundai Group, one of the three largest shipbuilders in South Korea, has achieved and exceeded its annual order target of $15.74 billion, with a completion rate of 141.9%. And it is highly unlikely that Samsung Heavy Industries(SHI) and Hanwha Ocean will be able to achieve their annual order targets by the end of 2023, which set at the beginning of the year.

SHI and Hanwha Ocean are in the final stages of negotiations for the second phase of Qatar Energy’s “100 Ships Program” LNG carrier project, but they may not be able to secure an order before the end of 2023, sources disclosed on Dec. 25th.

In October this year, Korea Shipbuilding & Offshore Engineering Co., Ltd.(HD KSOE) announced that it had signed a contract with Qatar Energy for the construction of 17 174,000 m3 LNG carriers to be built at HD Hyundai Heavy Industries’ Ulsan Shipyard, with deliveries scheduled to take place sequentially in the second half of 2029. Although, two months have passed, SHI and Hanwha Ocean are still in the process of finalizing price negotiations on the size of the remaining 20-ship order.

Industry observers believe that even if the two shipbuilders win a lot of orders in the last week of 2023, they are unlikely to achieve the targets set at the beginning of this year as the orders are likely to be signed in a decentralized manner.

Earlier this year, Samsung Heavy Industries and Hanwha Marine set annual order targets of $9.5 billion and $6.98 billion, respectively. As of Dec. 27, the two shipbuilders had achieved 72 % and 43 % of their targets, respectively. The order values were $6.8 billion and $3 billion, respectively.

Nevertheless, SHI (10.7 million CGT) remains the world’s largest shipyard in terms of orders on hand, followed by HD Hyundai Heavy Industries Ulsan Shipyard (10 million CGT) and Hanwha Ocean Geoje Shipyard (8 million CGT).

Despite the downturn in orders for merchant ships, Hanwha Ocean has performed well in the field of specialized ships this year, winning a series of orders.

“The news of the second contract in Qatar is taking longer than expected,” a shipbuilding industry insider said. “The negotiations are being prolonged as shipbuilders are not budging to raise ship prices as much as possible.”

Yangzijiang Shipbuilding

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