Shares of South Korean shipbuilder Hanwha Ocean climbed 12.5% in Seoul on Tuesday, after President Donald Trump said the company will be involved in constructing a new class of warships for the U.S. Navy.
Trump said the warships will be built at the Hanwha Philly Shipyard in Philadelphia, acquired by Hanwha Ocean in 2024. This is part of a broader U.S.-South Korea trade deal, with Hanwha Ocean pledging a $5 billion investment in its Philadelphia shipyard.
‘Trump-Class Battleships’
Making the announcement at an event at Trump’s Mar-a-Lago estate in Florida, Navy Secretary John Phelan referred to the warships as “Trump-class battleships” and said a forthcoming vessel dubbed the USS Defiant will be “the largest, deadliest and most versatile, and best-looking warship anywhere on the world’s oceans.”
The battleships will be armed with guns and missiles, as well as hypersonic weapons, electronic rail guns, and high-powered lasers.
Hanwha Ocean is one of South Korea’s major shipbuilding firms and has sought to deepen its presence in the U.S. market in recent years. Executives of the company told CNBC that it only makes one ship a year currently at its Philadelphia shipyard. The company will make a lot of the parts of the vessels in South Korea, and then assemble them in the U.S.
According to Trump, the U.S. plans to build two vessels over the next two years, and then ‘quickly’ have eight more ships and gradually expand the count to about 20-25 of them.
The administration’s focus on naval shipbuilding comes amid broader plans to expand and modernize the U.S. fleet, with discussions of new frigates and larger flagships underway in defense circles.
Price Action: Before Tuesday’s move, Hanwha Ocean stock had already been trading higher this year on strong demand for liquefied natural gas (LNG) carriers and optimism about defense-related contracts. The stock has surged 226% so far this year and closed the latest session at KRW 1,23,400 ($83.30).
South Korean defense stocks have skyrocketed this year, with major defense players such as Hanhwa Aerospace and Hyundai Rotem gaining over 170% and 270%, respectively, year to date, according to data from Benzinga Pro.
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