05-07-2016

S. Korea: Shipbuilders’ first-half new orders sink to record lows

shipbuilding

New orders clinched by South Korean shipyards fell to record lows in the first half of the year, largely due to a protracted industry slump, mirroring their worst-ever business performance, industry data showed on Monday.

According to the data compiled by global research firm Clarkson Research Services, a total of 6.32 million compensated gross ton (CGTs) worth of orders were placed around the globe in the January-June period, sharply down from 18.04 million CGTs the previous year.

In case of South Korean shipyards such as Hyundai Heavy Industries Co., their new orders tumbled to 830,000 CGTs in the first half, compared with 6.85 million CGTs a year earlier, the data showed.

The first-half new orders mark the lowest figure that South Korean shipbuilders have ever clinched since the global research agency began to compile related data in 1996.

The reading is also far lower than the previous record low of 6.51 million CGTs in the first half of 1999, and 7.79 million CGTs in 2009 when the financial rout hit the global economy.

Chinese shipbuilders bagged a combined 2.42 million CGTs in the first half, the largest, followed by Italy with 890,000 CGTs. Germany came in fourth with 710,000 CGTs, the data showed.

Meanwhile, South Korean shipbuilders clinched a combined 370,000 CGTs last month, the biggest among rivals, followed by China with 290,000 CGTs and Japan with 210,000 CGTs, according to the data.

South Korean shipbuilders have been under severe financial strain since the 2008 global economic crisis which sent new orders tumbling amid a glut of vessels and tougher competition from Chinese rivals.

The country’s top three shipyards — Hyundai Heavy Industries, Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. — suffered a combined operating loss of 8.5 trillion won (US$7.4 billion) last year due largely to increased costs stemming from a delay in the construction of offshore facilities and an industrywide slump, with the Daewoo Shipbuilding alone posting a 5.5 trillion won loss.

The shipbuilders have recently drawn up sweeping self-rescue programs worth 10.35 trillion won in their desperate bids to overcome a protracted slump and mounting losses.

Source: Yonhap

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