Hanwha Ocean secures Taiwanese ship order amid sanctions

Hanwha Ocean has been selected as the preferred bidder for a roughly 2 trillion won container ship order from Taiwanese shipping company Yang Ming Marine Transport. Analysts attribute the win to the ripple effects of U.S. sanctions on China’s shipbuilding industry imposed under former President Donald Trump, which have improved the competitive position of South Korean shipbuilders.

On July 17, Yang Ming’s board approved an order for seven 15,000-TEU (20-foot equivalent unit) LNG dual-fuel container ships from Hanwha Ocean, according to a company filing. With the market price for each vessel estimated at $200 million, the contract is expected to total approximately $1.4 billion. If finalized, the ships will be delivered between 2028 and 2029.

This marks another major deal for Hanwha Ocean, following its $1.67 billion contract in March to build six 24,000-TEU ultra-large container ships for Taiwan’s Evergreen Marine.

Chinese shipbuilders have traditionally dominated the container ship market thanks to lower prices. However, U.S. sanctions have led to growing hesitation among global buyers to purchase Chinese-built vessels, giving South Korean firms including Hanwha Ocean new opportunities. Beginning in October, the United States will impose a $50 per gross ton port fee on Chinese-flagged ships and an $18 fee on vessels built in China. These charges are scheduled to increase through 2028.

According to British market tracker Clarkson Research, China’s share of global new ship orders fell to 52% in the first half of this year, down from 68% a year earlier. Over the same period, South Korea’s share rose from 17% to 25%.

Hanwha Ocean has also expanded its presence in the defense sector, securing multiple contracts for the maintenance, repair, and overhaul (MRO) of U.S. Navy vessels. In August last year, the company won an MRO contract for the 40,000-ton logistics support ship USNS Wally Schirra. In November, it secured a similar deal for the 31,000-ton replenishment oiler USNS Yukon.

The global naval MRO market is estimated to be worth about $57.6 billion annually. Hanwha Ocean plans to expand its footprint in this sector while partnering with small and mid-sized maintenance firms in the Busan and South Gyeongsang regions to help stimulate the local economy.

“South Korean shipbuilders are gaining renewed recognition for their technology and quality, thanks to the Trump administration’s hard-line policy on China,” a shipbuilding industry official said.


Won-Joo Lee takeoff@donga.com