Industry analysts suggest that Korean shipbuilders are set to capitalize on the latest developments in the ongoing strategic competition between the United States and China, presenting an opportunity for increased market share on a global scale.
Following a positive response from the Joe Biden administration to a petition filed by five U.S. unions urging a review of China’s subsidies for shipbuilders, Korean shipbuilding stocks experienced significant gains in the market. Notably, shares of Samsung Heavy Industries surged by 13 percent, while Hanwha Ocean saw an 11 percent increase in stock price.
The momentum extended to other major players in the Korean shipbuilding sector, with HD Korea Shipbuilding & Offshore Engineering (KSOE) witnessing a 5 percent rise in stock price. Similarly, HD Hyundai Heavy Industries and Hyundai Mipo Dockyard, subsidiaries of HD KSOE, observed increases of 8 percent and 4 percent in their respective stock prices.
Analysts anticipate that the U.S. government’s potential sanctions on Chinese shipbuilders could enhance the competitiveness of Korean shipyards, leading to a boost in their market share. This shift is expected to be particularly evident in the gas carrier market, driven by increased transportation of liquefied natural gas and liquefied petroleum gas to the U.S.
Furthermore, there are expectations of strengthened ties between the U.S. Navy and Korean shipbuilders. Vice Chairman Chung Ki-sun of HD Hyundai and Vice Chairman Kim Dong-kwan of Hanwha Group are reportedly planning visits to the U.S. following discussions with U.S. Secretary of the Navy Carlos Del Toro during his recent visit to Korea. These discussions aim to explore opportunities for providing maintenance, repair, and overhaul services to the U.S. Navy.
Overall, the developments present a promising outlook for Korean shipbuilders amidst the evolving dynamics of global trade.
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