Recently, South Korea’s Samsung Heavy Industries announced that it has signed a construction contract with a shipowner from the Oceania region for two crude oil carriers, which are scheduled for delivery by May 2028.
The total contract value for these two Suezmax crude oil carriers is 237.3 billion Korean Won (approximately 169 million USD, 1.22 billion RMB), with the cost per vessel being about 84.5 million USD. For reference, data from Clarksons shows that the current newbuilding price for a 156,000-158,000 deadweight tonne Suezmax tanker is approximately 85 million USD, a 6% decrease from the 90 million USD seen during the same period last year.
Samsung Heavy Industries did not disclose specific information about the involved shipowner. According to foreign media reports, this order comes from the Greek shipowner Adam Polemis. Earlier in September, there were reports that Adam Polemis had signed a Letter of Intent with Samsung Heavy Industries for 2+2 Suezmax tankers. The construction of the new vessels will be handled by HSG Sungdong Shipbuilding (formerly Sungdong Shipbuilding).
In July of this year, Samsung Heavy Industries signed a “Strategic Business Agreement (MOU) for Building a Mutual Growth and Co-prosperity Model” with HSG Sungdong Shipbuilding and Kunhwa Company, formally initiating the construction of a cooperative ecosystem with domestic South Korean small and medium-sized shipbuilding partner companies (subcontractors).
According to the agreement, Samsung Heavy Industries will entrust HSG Sungdong Shipbuilding with the complete hull construction of tankers and entrust Kunhwa with the manufacturing of large blocks for LNG carriers. Through this measure, local small and medium-sized shipbuilding enterprises will secure stable workloads while gaining opportunities to improve their technical capabilities. Samsung Heavy Industries will thereby build a co-prosperity cooperation model that enhances competitiveness through improved project efficiency.
Through this cooperation, HSG Sungdong Shipbuilding is expected to return to the complete hull construction market. After delivering the last vessel from its order backlog in 2017, the shipyard has been engaged in ship block manufacturing and ship repair business.
Including the two new crude oil carrier orders received this time, Samsung Heavy Industries has secured a total of 27 new vessel orders this year, worth 5 billion USD (approximately 35.5 billion RMB), achieving 51% of its annual order target of 9.8 billion USD. These 27 new vessel orders consist of 7 LNG carriers, 9 shuttle tankers, 2 very large ethane carriers (VLEC), 6 crude oil carriers, 2 container ships, and 1 front-end engineering design (FEED) contract for a Floating Liquefied Natural Gas (FLNG) unit.
Specifically, in the merchant ship sector, Samsung Heavy Industries has secured 26 new vessel orders worth 4.269 billion USD, achieving 73.6% of its annual target of 5.8 billion USD. In the offshore sector, following the signing of a roughly 700 million USD FEED contract for one FLNG unit with an African shipowner in July this year, the company is progressing towards signing a formal contract and plans to secure one more FLNG order by the end of the year to meet its target.
At the beginning of this year, Samsung Heavy Industries set its annual order target for shipbuilding and offshore business at 9.8 billion USD, which is 33% higher than the actual order intake of 7.3 billion USD last year.
A representative from Samsung Heavy Industries stated: “The proportion of aging crude oil carriers is high. Coupled with the International Maritime Organization (IMO) strengthening environmental regulations and the EU’s carbon emission restrictions taking effect, replacement demand is expected to continue expanding, and the tanker market will maintain a strong ordering trend. With this successful acquisition of additional crude oil carrier orders, we are accelerating the pace towards achieving this year’s order target. The company will strengthen cooperation with domestic and international partners and respond flexibly according to changes in the global market environment.”
Samsung Heavy Industries stated that its current order backlog exceeds 30 billion USD, ensuring sufficient workload for over three years. Therefore, based on this stable backlog, the plan for 2025 is to continue prioritizing a selective order-taking strategy focused on profitability. Beyond LNG carriers, Samsung Heavy Industries is steadily expanding its order portfolio, focusing on high-value-added vessel types such as shuttle tankers and VLECs. While maintaining this selective order strategy centered on high-value-added vessels, Samsung Heavy Industries will also carefully study the market conditions for container ships and tankers, responding flexibly based on changes in the global market environment. Additionally, Samsung Heavy Industries is actively pursuing FLNG orders from countries like Mozambique, the United States, and Canada.
Samsung Heavy Industries aims to achieve an operating profit margin of 6% in 2025 through “aggressive” order-taking activities. In 2023, the company’s operating profit margin was 2.9%, and it improved to 5.1% in 2024.
