By Kwanwoo Jun

South Korean shipbuilders' shares rallied Thursday on brisk contract wins amid rising prices for new vessels.

Shares of Samsung Heavy Industries climbed as much as 16% to 9,210 won ($7.01) in early trade, leading the rally in local ship makers and outperforming the Kospi's 0.5% gain. Other shipbuilders Hanwha Ocean and HD Hyundai Heavy Industries rose as much as 13% to KRW27,450 and 11% to KRW122,900, respectively.

The rally reflects renewed hopes for better earnings, as their new-contract-win momentum resumed after a brief lull early this year.

According to U.K.-based Clarksons Research, South Korea last month reclaimed the world's top spot in shipbuilding contract wins from China. New global shipbuilding orders in February rose 18% on year to reach 3.4 million compensated gross tons, with South Korean shipbuilders accounting for 50% and Chinese rivals taking up 41%, according to Clarksons data.

"The [South Korea] shipbuilding industry is forecast to be able to improve profitability in earnest as it enters a period of ship prices rising and large-scale orders being placed," Korea Investment & Securities analyst K.M. Kim said in a research note Thursday.

South Korean shipyards may keep new contract prices higher given that their current backlog of work can keep them busy for the next three years, Kim added.

Clarksons' latest Newbuilding Price Index gained 0.2% on week to 181.81 on March 8, suggesting global prices for new vessels continued to rise, KB Securities analysts Chung Dong-ik and Seo Jun-mo said in a recent research note.

Write to Kwanwoo Jun at

(END) Dow Jones Newswires

03-14-24 0146ET