HD Korea Shipbuilding inks $494M LNG deal as vessel prices soften

HD Korea Shipbuilding & Offshore Engineering said Nov. 9, 2026 it secured a 662.9 billion won ($494 million) order to build two liquefied natural gas carriers for an unnamed Africa-based shipping firm.

The contract prices each 174,000-cubic-meter vessel at roughly $247 million. That valuation represents 3.77% of shipyard affiliate HD Hyundai Heavy Industries' 2025 consolidated revenue, down from peak quotes that cleared $260 million earlier this year.

Benchmark prices for large LNG carriers fell to $245 million in late October, according to data from Clarksons Research. The decline marks the first sustained price softening in the high-specification gas carrier sector since 2021.

South Korean shipyards have commanded premium pricing on gas tonnage because their membrane containment tanks operate with lower boil-off rates. Expanding Chinese berth space is now eroding that pricing premium.

Chinese shipbuilders took five of the seven large LNG carriers ordered worldwide in October, taking a 71.4% monthly market share. South Korean yards captured the remaining two vessels, or 28.6%.

Global shipowners ordered 76 large LNG carriers between January and October. South Korea secured 44 of those vessels, while Chinese shipbuilders won 32, Clarksons Research recorded.

China won only three LNG carrier orders in all of 2025. Its ten-fold intake expansion this year stems from capital investments at facilities such as the Changxingdao yard near Shanghai.

Hudong-Zhonghua Shipbuilding holds an order backlog of 57 LNG carriers, according to municipal shipyard records. The yard secured contracts for 10 vessels from Malaysia's MISC earlier this year.

Jiangnan Shipyard secured contracts for four LNG carriers from Abu Dhabi's ADNOC Logistics & Services and two from Singapore's Eastern Pacific Shipping. Those deals broadened China's customer base beyond domestic energy buyers.

Chinese yards are pricing comparable 174,000-cubic-meter hulls at discounts of $10 million to $15 million against Korean yards. That gap has drawn international charterers seeking early delivery slots.

At the same time, North American liquefied gas export ventures have delayed final investment decisions. Project developers face regulatory scrutiny and elevated engineering costs on the US Gulf Coast.

Those project delays have slowed ship charter commitments for export volumes originally slated for 2028. Without fixed long-term charters in place, shipowners have balked at yard quotes above $255 million.

Independent owners have asked South Korean builders to cut contract prices on new slots. Several shipping lines have deferred optional berth reservations into next year, shipbroking data shows.

Samsung Heavy contracted two LNG carriers with Japanese shipping operator Kawasaki Kisen Kaisha at roughly $250 million per hull. The Geoje shipyard is scheduled to deliver those ships sequentially by May 2029.

The price retreat threatens to clip future operating returns across South Korea's big three shipbuilders. The yards have relied on expensive LNG carriers to generate high operating margins.

HD Korea Shipbuilding reported preliminary third-quarter consolidated operating profit of 1.45 trillion won ($1.08 billion) on Oct. 28, a 37.3% gain from a year earlier.

Operating profit at shipyard unit HD Hyundai Samho reached 479 billion won in the third quarter, producing a 20.2% margin. Sales of high-priced LNG carriers drove those earnings, the company said.

The holding firm has booked 195 vessels valued at $21.69 billion so far in 2026. That total represents 93.1% of its provisional annual order target of $23.31 billion.

The group has booked 19 LNG carriers this year, while expanding orders for ammonia and liquefied petroleum gas carriers to 62 vessels to balance dock use.

Samsung Heavy Industries reported third-quarter operating profit of 338.4 billion won on Oct. 29, a 42.1% increase from a year earlier. Operating margin reached 10.7%, the shipbuilder said.

Samsung Heavy has booked orders for 20 LNG carriers and two floating production units worth $12.4 billion this year. The volume accounts for 89% of its $13.9 billion annual target.

Hanwha Ocean reported third-quarter operating profit of 485.7 billion won on Oct. 27, a 67.6% rise from a year earlier, on revenue of 3.41 trillion won. Gas carrier completions underpinned the profit increase, the shipbuilder said.

South Korean builders are countering the price decline by refusing orders below targeted profit floors. The shipyards hold roughly three years of work and can decline low-margin bids.

Yard managers are filling remaining slots with floating liquefied gas units and ammonia tankers. Those vessels command specialized engineering premiums that Chinese shipyards cannot yet match in volume.

HD Hyundai Heavy Industries plans to deliver the two newly contracted African vessels sequentially by Oct. 31, 2029. Commercial negotiations for remaining 2030 delivery slots resume in January.

The regulatory disclosure does not name the African shipowner, and the holding firm has not stated whether the contract includes options for additional vessels.