South Korean shipbuilders are experiencing a surge in profits, thanks to a steady wave of gas carrier orders. HD Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean are leading the charge. These firms secured high-value contracts for LNG, ammonia, and LPG vessels. Now, those deals are entering production phases and driving earnings growth.
Prices for these ships have risen by over 10 percent in the last two years. Construction costs, however, have remained relatively stable. This margin expansion allows companies to benefit more from each delivery. The result is stronger revenue and profit outlooks across the industry.
HD Hyundai Heavy Industries already reported major improvements. The company saw operating profit jump over 140 percent, while sales increased nearly 7 percent. Recent gas carrier orders now contribute around 30 percent of total revenue. That number could rise to 60 percent by year-end. Analysts say strong backlogs will support earnings through 2026.
Samsung Heavy and Hanwha Ocean show similar trends. Both companies hold backlogs with more than 60 percent in gas vessels. Additionally, these orders are expected to boost earnings starting next year. The consistent delivery pipeline supports stable financial results.
A typical 174,000-cubic-meter LNG ship now sells for over $260 million. That’s up from $232 million just two years ago. These high prices reflect growing demand and limited global capacity. Buyers continue to choose South Korean yards for complex ship designs.
Qatar’s earlier LNG orders still contribute a significant portion of revenues. While those ships sold at lower prices, they provide steady production volume. These older contracts offer balance as higher-priced orders phase into earnings. For HD Hyundai, Qatar accounts for 37 percent of revenue; for Samsung and Hanwha, it’s 27 and 24 percent, respectively.
Labor costs remain under control thanks to a more experienced foreign workforce. These workers have improved shipyard productivity. Stable wage trends are helping firms maximize profit from their gas carrier orders. At the same time, efficient operations limit unexpected delays.
Steel costs are another key factor. Shipbuilders rely on thick steel plates, which depend on China’s construction demand. China’s real estate slowdown has weakened demand for steel. As a result, prices remain low and favorable for shipyards. However, this helps protect margins across ongoing contracts.
Looking ahead, analysts expect continued profit growth from South Korea’s gas-focused shipbuilding sector. High vessel prices and cost stability support this trend. Nevertheless, with strong order books and skilled labor, the industry appears well-positioned for long-term gains.
