Shares of Taiwanese and other Asian shipbuilders and shipping firms rallied yesterday on expectations that European countries might seek seaborne sources of natural gas as tension escalates with Russia over Ukraine.
Russia is Europe’s top gas supplier, with typically about one-third of flows traveling through Ukrainian pipelines.
A disruption of Russia’s supply to Europe is likely, the Eurasia Group has said, with Germany effectively freezing the approval process to start the new Nord Stream 2 gas pipeline.
For Europe to boost liquefied natural gas (LNG) imports from other countries such as the US, it would need more tankers to ship the fuel by sea, said Lee Dong-heon, an analyst at Daishin Securities Co in Seoul.
In Taiwan, the sectoral gauge of shipping and transportation firms surged as much as 3.4 percent, leading the benchmark TAIEX higher.
Among the winners were China Container Terminal Corp (中國貨櫃運輸) and TZE Shin International Co (志信國際), which were up about 10 percent.
South Korean shipbuilders and their suppliers were the biggest winners on the country’s benchmark equity index.
STX Engine Co and STX Heavy Industries Co, which manufacture engines and engine components for ships, jumped more than 20 percent.
The KOSPI was up as much as 0.8 percent before paring its advance.
All major South Korean shipyards soared, including Daewoo Shipbuilding & Marine Engineering Co, Korea Shipbuilding & Offshore Engineering Co, Hyundai Heavy Industries Co and Samsung Heavy Industries Co.
“South Korean shipmakers account for about 90 percent of global LNG ship orders,” Lee said. “Although orders for the LNG tankers may not go up all of sudden, investment sentiment on the sector is still improving.”
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