Hyundai Heavy Industries Co., led a decline in South Korean shipy
ard stocks in Seoul trading on concern prices for new vessels may drop.
Hyundai Heavy fell 5.8 percent, the biggest decline in more than a week, to close at 319,500 won in Seoul. Hyundai Mipo Dockyard Co., a unit of Hyundai Heavy, fell 7.1 percent to 201,500 won. The shares also dropped after UBS AG said orders may slow this year from the record sales in 2007.
The price for second-hand bulk carriers was as much as 61 percent more than for new vessels last year because of increased demand for iron ore and coal from China and India. Shipyards in South Korea
, the world's biggest shipbuilding nation, increased their order backlog last year, even with ship prices at records.
The Baltic Dry Index, a benchmark for the price of shipping bulk commodities, has almost halved from an all-time high of 11,039 in November on concerns a U.S. economic recession may lead to a decline in global trade.
Hyundai Heavy was the biggest decliner among 50 top companies traded on South Korea's Kospi index.
Shipyards in South Korea, the world's biggest shipbuilding nation, have orderbooks that stretch as far as into 2012. That is prompting shipbuilders to increase production to meet demand.
``The Korean shipbuilding sector could remain volatile in the near term, given weak new order expectations in 2008 from 2007,'' UBS analyst Son Yong Suk wrote in a note dated yesterday. He kept a ``buy'' rating for Hyundai Heavy shares.
Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest shipyard, dropped 1.2 percent to 34,100 won. Samsung Heavy Industries Co., the world's second-biggest, fell 0.5 percent to 28,350 won. STX Shipbuilding Co., the world's No. 5, shed 5.3 percent to 33,300 won.
A capesize bulk carrier, the biggest of its type, cost about $97 million in December, 43 percent more than a year earlier, according to London-based Clarkson Plc, the world's biggest shipbroker
. The price of a five-year vessel of the same size was 55 percent more expensive.