23-07-2016

S. Korea: Shipbuilders’ order backlog hits 12-year low

Shipbuilding

Order backlog held by South Korean shipyards fell to the lowest level in 12 years in June amid a protracted slump in the global shipbuilding sector, industry data showed Friday.

According to the data compiled by global research firm Clarkson Research Services, the shipbuilding order backlog held by Hyundai Heavy Industries Co. and its other local rivals stood at 25.1 million compensated gross tons (CGTs) as of end-June, the lowest since January 2004, when the comparable figure was 24.2 million CGTs.

Their end-June order backlog dropped 20 percent from a year earlier, plunging at a sharper rate compared with a 12 percent dip in the global shipbuilding order backlog over the cited period.

Order backlogs held by Chinese and Japanese rivals sank 11 percent and 14 percent, respectively, over the cited period, the data showed.

South Korean shipyards’ order backlog accounted for 25 percent of the combined order backlog held by all shipyards around the globe in total, while the comparable figures for Chinese and Japanese rivals were 37 percent and 22 percent, respectively, they showed.

Meanwhile, South Korean shipbuilders clinched a total of 800,000 CGTs worth of new orders in the first half of the year, dropping 88 percent on-year, the data showed.

The shipbuilding industry, once regarded as the backbone of the country’s economic growth and job creation, has been reeling from mounting losses caused by an industrywide slump and increased costs.

The country’s top three shipyards suffered a combined operating loss of 8.5 trillion won ($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 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 a desperate bid to overcome a protracted slump and mounting losses.

Source: Yonhap

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