SEOUL, February 07 (AJP) - For the first time in over a decade, South Korea’s three major shipbuilders turned a collective operating profit in 2024, buoyed by a surge in high-value liquefied natural gas (LNG) carrier orders and a global ship-replacement cycle.
Their combined operating profit reached 2.17 trillion won ($1.63 billion), marking a significant turnaround from years of losses.
HD Korea Shipbuilding & Offshore Engineering led the resurgence, reporting an operating profit of 1.43 trillion won - an increase of 408 percent from the previous year. Revenue climbed 19.9 percent to 25.5 trillion won.
Samsung Heavy Industries followed, posting revenue of 9.9 trillion won and an operating profit of 502.7 billion won. Hanwha Ocean, after years in the red, returned to profitability with 237.9 billion won in operating income on revenue of 10.77 trillion won, a 45.5 percent jump.
The industry’s recovery reflects the successful delivery of orders placed during the previous downturn, bolstered by favorable exchange rates and stabilized raw material costs, particularly for steel plates. Profit margins have improved, aided by steady demand for high-value vessels such as LNG carriers and eco-friendly ships.
Despite these gains, South Korea’s shipbuilders continue to face stiff competition from China.
Chinese shipyards dominated new orders in 2024, securing a 70.6 percent global market share, while South Korea claimed just 16.7 percent, according to data from Clarksons Research.
South Korea’s order backlog shrank 4.8 percent to 37.87 million compensated gross tons (CGT), marking its first decline since 2020.
China’s shipbuilders have leveraged competitive pricing to win contracts for bulk carriers and conventional vessels. The country’s largest state-owned shipbuilder has also announced substantial investments in facilities to expand its capabilities in high-value ship segments, intensifying the rivalry with South Korean firms.
Looking ahead, industry analysts expect South Korea to retain its lead in high-end shipbuilding, particularly in LNG carriers and eco-friendly vessels.
Potential increased cooperation with the U.S. maritime sector under the Trump administration and tightening environmental regulations from the International Maritime Organization could further sustain demand for advanced ship technologies.
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