US President Donald Trump stated on local time 15일 that the United States will collaborate with Korean companies to rebuild US naval power and pursue purchasing foreign-built warships. Trump explained at the US Army War College in Carlisle, Pennsylvania that 'we will look at some companies from Korea and other countries' and that 'they are cooperating with us in the shipbuilding sector.' The statement follows previous discussions with President Lee Jae-myung at the G7 summit and NATO summit on local time 7일, where Trump asked whether Korea could rapidly build 10 US warships, and comes as Korean shipbuilding stocks have declined 38-47% from their March-May highs.
Trump Announces Foreign Warship Purchase Plan
Trump stated at the defense and innovation conference that 'our Navy needs a lot of ships' and that 'we will also purchase some ships built overseas.' The president explained that Korean companies and others 'are cooperating with us in the shipbuilding sector, and we will also build directly.' President Lee Jae-myung revealed that Trump asked 'whether 10 US warships could be rapidly built,' and both leaders agreed to continue working-level consultations to review specific measures. The US Department of Defense and Navy recently sent requests for information (RFI) to domestic shipbuilders including HD Hyundai Heavy Industries and Hanwha Ocean regarding combat ships and refueling vessels.
Korean Shipbuilding Stocks Decline 38-47% from March-May Highs
According to the Korea Exchange, Hanwha Ocean's stock price closed at 82,000 won on 15일, down 47.0% from its high of 154,800 won (intraday) on March 3. HD Hyundai Heavy Industries declined 38.4% from its high of 765,000 won (intraday) on May 27, and Samsung Heavy Industries fell 38.2% from its high of 35,350 won (intraday) on April 23. The decline occurred as funds flowed toward semiconductor stocks including Samsung Electronics and SK Hynix in the domestic market, and the recent failure to secure the Canadian submarine project also negatively impacted stock prices.
Stocks Rise 0.4-2.6% Following Trump Statement
On 16일 at 9:52 AM, Hanwha Ocean rose 2.6%, HD Hyundai Heavy Industries gained 1.4%, and Samsung Heavy Industries increased 0.4%, showing upward momentum despite the broader KOSPI market triggering a sell-side circuit breaker. Yang Seung-yoon, researcher at Eugene Investment & Securities, stated that 'President Trump emphasized the need to strengthen US naval power and mentioned again the possibility of cooperation with Korean shipbuilders,' explaining that this means 'ships built in regions outside the United States can also be purchased.'
Analysts Cite Excessive Decline and Record Order Data
Kim Dae-sung, researcher at DS Investment & Securities, stated that 'if a main contract for exporting warships to the United States and other countries is successful, premium recovery will be possible,' noting that 'the US Department of Defense and Navy sent RFI related to refueling ships and combat ships to domestic shipbuilders, and demand for warship orders from the Middle East is expanding after the US-Iran war.' Han Young-soo, researcher at Samsung Securities, stated that 'considering the record-high order indicators, the recent stock price correction is difficult to explain except for the overall market valuation decline,' diagnosing that 'if momentum appears to revive market interest, sufficient rebound is possible.' Han added that 'global ship orders in the first half of this year increased 88% year-on-year despite a high base, and this is the largest scale in history on a first-half basis,' stating that 'momentum such as offshore structure orders and expansion of shipbuilding technology into the power business is expected, and even excluding this, earnings will support stock prices.'
FAQ
What did Trump say about Korean shipbuilders on local time 15일?
Trump stated at the US Army War College in Carlisle, Pennsylvania that the United States will collaborate with Korean companies to rebuild US naval power and will purchase foreign-built warships. He explained that 'we will look at some companies from Korea and other countries' and that 'they are cooperating with us in the shipbuilding sector, and we will also build directly.'
How much have Korean shipbuilding stocks declined from their highs?
According to the Korea Exchange, Hanwha Ocean declined 47.0% from its March 3 high of 154,800 won to 82,000 won on 15일, HD Hyundai Heavy Industries fell 38.4% from its May 27 high of 765,000 won, and Samsung Heavy Industries dropped 38.2% from its April 23 high of 35,350 won.
What was the market response to Trump's statement on 16일?
On 16일 at 9:52 AM, Korean shipbuilding stocks showed upward momentum with Hanwha Ocean rising 2.6%, HD Hyundai Heavy Industries gaining 1.4%, and Samsung Heavy Industries increasing 0.4%, despite the broader KOSPI market triggering a sell-side circuit breaker.
