After China’s Ministry of Commerce included five U.S.-related subsidiaries of Hanwha Ocean Co., Ltd. (hereinafter referred to as “Hanwha Ocean”) in its countermeasures list, the stock prices of South Korea’s three major shipbuilding giants plummeted.
In terms of market performance, Hanwha Ocean opened at 109,400 won in the morning session, briefly rose to 111,400 won, then gradually declined. The decline intensified in the afternoon, hitting an intraday low of 99,600 won, a drop of over 10%, before a slight rebound to close at 103,100 won.
Analysts pointed out that the crash in Hanwha Ocean’s stock price is directly related to the countermeasures from China’s Ministry of Commerce.
On October 14, according to the official website of the Ministry of Commerce, in response to the U.S. Section 301 investigation measures against China’s maritime, logistics, and shipbuilding industries, and approved by the national coordination mechanism for countering foreign sanctions, the Ministry of Commerce announced the “Decision on Taking Countermeasures Against Five U.S.-Related Subsidiaries of Hanwha Ocean Co., Ltd.”, effective from October 14, 2025.
The document shows that the U.S. investigation and measures against China’s maritime, logistics, and shipbuilding industries seriously violate international law and the basic norms of international relations, severely harming the legitimate rights and interests of Chinese enterprises. The relevant U.S. subsidiaries of Hanwha Ocean Co., Ltd. assisted and supported the U.S. government’s related investigation activities, endangering China’s sovereignty, security, and development interests.
In accordance with Articles 3, 4, 6, 9, 10, and 15 of the “Law of the People’s Republic of China on Countering Foreign Sanctions”, and Articles 3, 5, 8, and 10 of the “Regulations on the Implementation of the Law of the People’s Republic of China on Countering Foreign Sanctions”, and approved by the national coordination mechanism for countering foreign sanctions, China has decided to include five U.S.-related subsidiaries of Hanwha Ocean Co., Ltd.—Hanwha Shipping LLC, Hanwha Philly Shipyard Inc., Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp.—in the countermeasures list and implement the following countermeasures: prohibiting organizations and individuals within China from engaging in transactions, cooperation, and other activities with them.
Hanwha Ocean is one of South Korea’s “big three” shipbuilders. Its predecessor was Daewoo Shipbuilding & Marine Engineering. After being acquired by the Hanwha Group in 2022, it was renamed, forming a “dual-drive” structure combining commercial shipbuilding and military vessels. With technological barriers and long-term order advantages, its global market share remains stable between 5% and 8%, ranking among the top ten globally.
The Hanwha Group has deep ties with the United States. Its aerospace and defense company has long provided ammunition and equipment to the U.S. military and maintains close cooperation with the NATO system; its LNG ship business directly supports U.S. natural gas exports; the group’s new energy company also has a large-scale presence in the U.S. solar industry. In recent years, Hanwha Ocean has invested heavily in acquiring the Philadelphia Shipyard in the U.S. and undertaking U.S. Navy maintenance contracts, further strengthening its strategic synergy with the United States.
However, from an equity structure perspective, Hanwha Ocean remains a purely domestic South Korean enterprise. Its controlling shareholder, the Hanwha Group, is controlled by the Kim Seung-youn family through cross-shareholdings. Foreign capital participates only passively through institutions like BlackRock and Vanguard, without involvement in governance or influence over strategic decisions. Even if there are some U.S. loans, they are merely financial debt relationships.
It is worth noting that under its “manufacturing reshoring” policy, the United States is attempting to revive its shipbuilding industry. Currently, the U.S. can produce fewer than five commercial ships annually, while China’s annual output exceeds 1,700 ships, representing a vast disparity in market share. For this reason, the White House has been courting South Korean shipbuilders, hoping to leverage the capabilities of companies like Hanwha Ocean to bring back technology and production capacity.
China’s countermeasures have already had a direct impact. Industry insiders point out that Hanwha Ocean heavily relies on Chinese components and materials in shipbuilding, with key equipment such as marine steel and valves almost entirely sourced from China. Approximately 14% of its engine business revenue comes from Chinese shipyards. After the sanctions take effect, supply chain substitution will increase its construction costs by about 10%, weakening its competitiveness in the commercial ship market.
Due to concerns that China’s countermeasures might spread, the stock prices of South Korea’s other two major shipbuilding giants also fell sharply. On October 14, Hyundai Heavy Industries (KRX: 329180) saw its stock price drop significantly, closing at 496,000 won, down 21,000 won or 4.06% from the previous trading day. The stock opened higher at 513,000 won in the morning, reaching an intraday high of 522,500 won, but market sentiment weakened in the afternoon. After 1 PM, the price quickly fell to around 507,000 won, then broke below the 490,000 won mark, before stabilizing slightly at the close.
Samsung Heavy Industries (KRX: 010140) also weakened in sync, closing at 21,200 won, down 1,050 won or 4.72% from the previous trading day. The stock briefly strengthened in the morning before declining continuously, with the decline accelerating in the afternoon. It hit a low of 20,850 won and maintained low-level fluctuations throughout the closing session.
