South Korea’s HD Korea Shipbuilding & Offshore Engineering (HD KSOE) announced on Thursday that it has lowered its order target for this year by 38.6%, aiming for $15.83 billion compared to $25.78 billion in estimated orders last year.
The reduced target reflects the declining appetite for new ships from global shipping companies, with industry data showing a steady drop in orders since 2021.
According to Clarkson Research, ship orders peaked at 2,336 in 2021, declining to 1,941 in 2022 and 1,593 last year. The Export-Import Bank of Korea predicts a further 25% drop in total order volume for 2024.
HD KSOE's subsidiaries will also see adjusted targets: HD Hyundai Heavy Industries Co. aims for $9.53 billion, Hyundai Mipo Dockyard Co. $3.1 billion, and Hyundai Samho Heavy Industries $3.2 billion.
However, HD Hyundai Heavy Industries plans to pursue a niche in special vessels, targeting a staggering 615.9% increase in orders for this category.
However, there are many forecasts that HD KSOE's actual orders this year will exceed the target.
"HD KSOE sets conservative targets to selectively order only profitable volumes," an industry source said "Last year's orders were also 42% higher than the original target."
Despite the cut order target, HD KSOE has raised its sales target for this year to 24.1 trillion won ($18.39 billion), a 10% increase from 21.2 trillion won in 2023.
This optimism stems from the expected delivery of high-priced ships ordered in 2021 when shipbuilding costs were significantly higher.