Samsung Heavy Industries said that orders this year for its vessels and offshore platforms may fall as much as 21 percent as demand weakens from three consecutive years of records, Bloomberg reported.
New contracts may drop to between $10 billion and $12 billion from an all- time high of $12.6 billion last year, reports indicated. Even the low end would be the second- highest level of new business in the company's history.
Samsung Heavy and other yards in South Korea, home to the world's largest shipyards, took almost half of the orders last year in the world's $100 billion ship industry, as increased demand for fuel and global trade prompted shipowners to expand their fleets.
Backlogs are at their highest ever, representing more than three years of work for the South Korean shipbuilders.
Hyundai Heavy faces increased prices for steel plate used to make ship hulls and a won that has risen against the dollar, reducing the value of its dollar-denominated contracts when converted into the South Korean currency, the statement said. The won rose 8.8 percent last year, the third-biggest increase among the 15 most actively traded currencies in the Asia-Pacific region.
In October, Dongkuk Steel Mill, the third-biggest South Korean steel maker, raised the price of steel plate by 8.5 percent to 635,000 won a ton, Samsung Heavy said.
The order backlog at South Korean yards reached a record $90.3 billion of vessels at the end of September, the South Korean Ministry of Commerce, Industry and Energy said Oct. 25.