Korean shipbuilding stocks experienced a significant surge on Nov. 7 following remarks by U.S. President-elect Donald Trump. During a 12-minute phone call with President Yoon Suk Yeol at 7:59 a.m., Trump emphasized the need for Korea’s cooperation in the U.S. shipbuilding industry, leading to a notable market reaction.
Hanwha Ocean’s stock closed at 33,850 won, marking a 21.76% increase from the previous day. During the trading session, the stock peaked at 33,950 won, up 22.12%. Similarly, HD Hyundai Heavy Industries saw its stock rise to 27,400 won, a 15.13% increase, with an intraday high of 27,500 won, up 17.34%. Other shipbuilding stocks also saw significant gains, including Samsung Heavy Industries (9.17%), HJ Shipbuilding & Construction (9.00%), HD Korea Shipbuilding & Offshore Engineering (6.03%), and HD Hyundai Mipo Dockyard (5.09%).
The surge in stock prices can be attributed to President-elect Trump’s remarks during his call with President Yoon. Trump stated, “I am well aware of Korea’s world-class capabilities in building warships and ships, and we need to closely cooperate with Korea not only in exporting our ships but also in the fields of repair, maintenance, and overhaul. I want to continue discussing this matter in detail with President Yoon.”
This statement has raised expectations for the domestic shipbuilding industry, particularly for companies like Hanwha Ocean and HD Hyundai Heavy Industries, which are exploring entry into the U.S. Navy maintenance, repair, and overhaul (MRO) market. Lee Kyung-min, a researcher at Daishin Securities, commented, “Expectations for the domestic shipbuilding industry have increased following President-elect Trump’s remarks. In particular, Hanwha Ocean and HD Hyundai Heavy Industries, which are exploring entry into the U.S. Navy MRO market, showed a clear upward trend.”
In July 2024, HD Hyundai Heavy Industries signed a ship maintenance agreement with the U.S. Navy Supply Systems Command, marking the first time a Korean company entered the U.S. Navy MRO market. This strategic move is expected to benefit from the exclusion of China from strategic industries under the Trump administration, as anticipated by the securities industry.
Samjong KPMG released a report on November 7, analyzing the potential increase in demand for LNG and LPG due to the Trump administration’s fossil fuel-focused policies. The report suggests that these policies could benefit the Korean shipbuilding industry, which is a leader in building energy carrier ships.
However, concerns have been raised about the potential decrease in trade volume and maritime cargo volume due to strengthened global protectionism and a regression in environmental policies. Jung Dong-ik, a researcher at KB Securities, emphasized, “The impact of the Trump administration’s policies on the Korean shipbuilding industry is complex, so a cautious response is necessary.”
Source: Business Korea
