South Korea’s Samsung Heavy Industries is set to sign a $1.33 billion shipbuilding contract with Transpetro, a shipping subsidiary of Brazil’s Petrobras, to construct nine Suezmax shuttle tankers. Originally, the order was planned to be shared between Chinese and South Korean shipyards, “but the shipowner has decided to award the entire contract to Samsung Heavy Industries to avoid political risks.”
According to Korean media reports, the negotiations between Samsung Heavy Industries and Transpetro have entered the final stage. The order includes the construction of nine 158,000 DWT Suezmax shuttle tankers, with a total order value of about $1.33 billion and a single-vessel cost of $147 million. The first two vessels will be delivered in 2027 and the remaining seven in 2028.
Transpetro initially planned to allocate the order for joint construction by Chinese and Korean shipbuilders, but after an internal assessment, it finally decided to award the entire order to Samsung Heavy Industries. “Behind this decision, the U.S.’s continued pressure on China’s shipbuilding industry may have played a key role,” the Korean media said.
Earlier this year, the U.S. Department of Defense blacklisted China State Shipbuilding Corporation (CSSC) on the grounds of “association with the Chinese military”, restricting it from doing business with U.S. firms, which has an impact on the shipbuilding and maritime policies of other countries with which the U.S. has trade relations.
In addition, the U.S. Government is considering imposing additional port charges on vessels built in China or flying Chinese flag. Under the proposed program, the vessels in question would be required to pay up to $1.5 million each time they call at a U.S. port. This policy will increase the operational pressure on shipping companies to choose Chinese-built vessels and weaken the competitiveness of Chinese shipbuilders.
South Korea’s shipbuilding industry generally believes that as the U.S. continues to tighten its policies on China’s shipbuilding industry, South Korean shipbuilders will reap huge benefits from it. Kim Hoon-min, head of the business planning team at Hanwha Ocean’s Merchant Marine Division, said in a conference call last month, “Although Chinese shipbuilders have an advantage in capacity expansion and large orders, the U.S.’s moves to tighten trade sanctions and blacklist Chinese shipbuilders are expected to boost the competitive edge of South Korean shipbuilders.”
Samsung Heavy Industries has set its 2025 operating income and operating profit targets at KRW 10.5 trillion and KRW 630 billion, respectively, a significant improvement over the KRW 9.9831 trillion operating income and KRW 502.7 billion operating profit realized in 2024. Although Hanwha Ocean has not disclosed the specific target, but internally expected that this year’s operating profit will exceed last year’s level. HD Korea Shipbuilding & Offshore Engineering (HD KSOE) even set the 2025 order target at 18.05 billion U.S. dollars, an increase of 33.7% over last year.
A South Korean industry insider believes that the Korean shipbuilding industry is ushering in a new round of development opportunities. On one hand, the prospects for shipbuilding cooperation with countries such as the U.S. and India are broad; on the other hand, the indirect benefits brought by U.S. policies toward China have also created a favorable market environment for Korean shipbuilders. With multiple positive factors converging, growth expectations for the Korean shipbuilding industry have risen to a historic high.