South Korea’s top three shipbuilders’ stocks extended their rally on Wednesday as investors bet on increased chances of a winning streak in blockbuster orders in LNG carriers following a milestone deal with Qatar Petroleum.

Korea Shipbuilding & Offshore Engineering Co. gained 4.99 percent to 103,000 won, Daewoo Shipbuilding & Marine Engineering (DSME) 7.12 percent to 29,350 won, and Samsung Heavy Industries Co. 18.34 percent to 6,970 won in Seoul.

Investors have turned buoyant about Korean shipbuilders after the country’s big three signed a capacity reservation pact with Qatar Petroleum (QP) on Monday. The pact allows the state-owned petroleum company to reserve construction capacity in Korean dockyards for more than 100 LNG ships through 2027.

This landmark deal raises the chances for the orders for vessels for Russia’s Arctic LNG 2 natural gas project and another LNG project in Mozambique.

Russia is planning to place an order for a combined 25 LNG ships under the Arctic project, according to industry sources. Among the first batch of 15 carriers, five already went to Samsung Heavy Industries, and the remaining 10 also are highly expected to go to the same builder.

But for the second batch of 10 carriers, markets expect DSME and China’s Hudong-Zhonghua Shipbuilding will very likely be the winners.

In Mozambique, the three Korean companies are expecting orders for up to 17 carriers this year.

This year only, about 50 additional LNG ship orders could come on top of the blockbuster deal from Qatar, market analysts expected.

Korean builders once again proved their world-class technologies in building LNG carriers to the world and the deal would further help them add more orders from other countries aiming to increase their annual LNG output for market leadership, industry sources said.

But some analysts remain skeptical about whether the shipbuilding industry would enter another super booming cycle in the next few years citing the economic slowdown across the world including China, which enjoyed the rapid growth in the early 2000s when the industry boomed, and falling trades due to the COVID-19 pandemic and growing protectionism on the global trade front.

According to Clarkson Research, the cumulative vessel order volume in the first quarter of this year reached 2.33 million compensated gross tonnage (CGT), down 71.3 percent from the same period a year earlier.

By Noh Hyun, Song Gwang-sup and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]