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Korea Investment & Securities Maintains 'Overweight' on Shipbuilding Amid IMO Regulation Hopes
Producer Manufacturing · Trucks/Construction/Farm Machinery · yonhap_finance · 2026-09-01
Korea Investment & Securities expects potential amendments to MARPOL to boost shipbuilding valuations by driving demand for new vessels and retrofitting.
What Happened
Industry Outlook: Korea Investment & Securities anticipates that the upcoming amendments to the International Convention for the Prevention of Pollution from Ships (MARPOL) will serve as a catalyst for higher valuations in the shipbuilding sector. Analysts suggest that the vote scheduled for the 85th session of the IMO's Marine Environment Protection Committee could significantly impact market sentiment.
Current Market Dynamics: The report highlights that global shipowners have shown limited incentive to scrap aging vessels, with current scrapping rates hovering around 10.8% of annual delivery volumes. This lack of replacement activity has kept the cycle from accelerating despite steady new ship deliveries.
Impact of Regulations: Should the proposed amendments pass, the industry expects a surge in scrapping rates as environmental compliance becomes more stringent. This shift is projected to trigger a long-term cycle of new ship orders and create a robust market for carbon-reduction retrofitting services.
Investment Stance: Given these expectations, the brokerage firm maintains an 'Overweight' rating on the shipbuilding sector. They emphasize that companies with new-build capacity and those specializing in vessel modifications are well-positioned to benefit from the evolving regulatory landscape.