SHARES in South Korean shipbuilders are rising following anticipation of benefits from the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act, also known as the Ships for America Act.

HD Korea Shipbuilding Offshore Engineering shares rose 8.24% and its shipbuilding affiliate HD Hyundai Heavy Industries gained 3.45%.

Samsung Heavy Industries and Hanwha Ocean increased by 2.77% and 7.04%, respectively.

The move comes as a sense of crisis regarding China’s growing dominance in the global maritime sector provides the backdrop to the bill, which seeks support for the US maritime industry.

According to a statement from US congressman John Garamendi, one of the four congressmen who introduced the bill, the bill responds to the urgent need to strengthen America’s maritime industry and aims to revitalise the US merchant marine to transport vital goods and military cargo during times of conflict, while strengthening American supply chains in peacetime.

“Currently, about 80 US-flagged ships are engaged in international commerce compared to over 5,500 China-flagged vessels. US shipyards’ growing industrial base cannot produce ocean-going vessels at scale,” the congressman said.

The Ships for America Act includes the establishment of a national goal of increasing the international US-flag fleet of 250 ships in 10 years through the creation of the strategic commercial fleet programme, which would develop a fleet of commercially operated, US-flagged, US-crewed, domestically built merchant ships that can compete in international trade.

The act also includes a proposal for the use of a foreign-built vessels as an interim solution.

Arizona senator Mark Kelly said, “An ‘interim vessel’ means it remains in the fleet only until it can be replaced by a US-built vessel, or it may serve in the fleet under a full-term operating agreement. However, foreign-built vessels other than ‘interim vessels’ shall not be allowed to enter the fleet after fiscal year 2029.”

With regard to shiprepairs, the bill would increase the duty on any repairs made to the ship in a foreign shipyard of an allied country from the current 50% to 70%. The tariff rises to 200% for any repairs made in shipyards in foreign countries of concern, such as China.

The duty may also be waived if a ship registered in the strategic commercial fleet first makes a good faith effort to have repairs carried out in the US.

This means that South Korean companies would be given the opportunity to repair the strategic commercial fleet and receive duty exemption.

Korea Investment & Securities analyst Kang Kyung-tae said: “If the bill becomes law, South Korean shipbuilders will benefit from newbuilding contracts and MRO business. Starting next year, US shipowners are likely to contract South Korean and Japanese shipbuilders to build new ships to be delivered by 2029. This is because foreign-built ‘interim’ vessels will not be allowed to enter the strategic commercial fleet after fiscal 2029.”