Hyundai Heavy Industries is testing an LNG carrier before it is delivered to Norway. (Photos: HHI)

President Ga Sam-hyun of Hyundai Heavy Industries.

Hyundai Heavy Industries is predicted to surpass this year’s sales goal of $13.2 billion, HHI President Ga Sam-hyeon said. “HHI is likely to see winning shipbuilding order records top this year’s goal, and riding on the back of afterward performance improvement, (HHI) is expected to return to the previous years’ average in 2020,” he said.

Chances are high that the Korean shipbuilding industry may see a revival from the years-long economic downturn as Korean shipbuilders, including HHI, have swept all LNG ship orders so far this year.

At HHI’s analysts meeting, President Ga of HHI, the nation’s largest shipbuilder, said, “Order records are expected to surpass this year’s goal of $13.2 billion on the back of this year’s winning of LNG ship orders.”

It was the first time that Ga has made a public appearance since last month when he was selected to president of the company.

On the other hand, in consideration of the order industry’s characteristics in which the portion of orders out of sales remained high in 2016 and 2017, President Ga said outlooks in 2010 are not rosy. HHI is concentrating all capabilities on steps such as retrenchment to turn around on top of the constant recovery of the order market, he said.

HHI Group’s shipbuilders – HHI, Hyundai Mipo Shipyard and Hyundai Samho Heavy Industries – have won orders to build a combined 146 ships, including 25 LNG and 25 other containerships and 51 tankers, achieving 95 percent of its annual goal. HHI alone won a total of 53 ship orders worth $6.2 billion, accounting for about 91 percent of the 2018 goal.

Citing a report by the shipbuilding and maritime analysis company Clarksons that an annual average of more than 60 LNG carriers will be ordered by 2027, President Ga said if the order market’s trend continues, the shipbuilding industry will soon return to the average levels of previous years.

 
On the back of the shipbuilding industry’s upswing, international investors were net buyers of HHI group shipbuilder shares. Figures released by the Korea Exchange as of Dec. 11, showed that foreign investors net bought 297,981 HHI shares worth 40.5 billion won for one month between Nov. 10 and Dec. 10. to DSME, foreign investors were net buyers of 1,647,032 DSME shares worth 57.8 billion won.

The nation’s three shipbuilders got away with 53 ships out of 63 LNG carriers up for grabs thanks to the recent rising business, which has led to foreigners’ net buying of Korean shipbuilder shares.

Market consensus showed that the demand for LNG carriers, which had a few clinical cycles in past years, is forecast to remain high for the time being, as LNG has been showcased as an eco-friendly energy source of late.

Kim Hyun, a corporate analysis team leader with Meritz Securities, said LNG is on the rising supply and demand cycles, so the demand for LNG carriers is expected to continue to rise. In reality, LNG traffic volumes grew a meager 0.3 percent in an annual average growth rate between 2012 and 2015, but they began to rise around 10 percent annually on the average last year.

The International Energy Agency released a forecast that the global natural gas demand would grow an annual average rate of 1.6 percent by 2040, a jump of an about 45 percent over 2017.