DW: Cyclical Steel Ride Continues

By Michelle Howard
Monday, May 19, 2014

Since 1990, steel has been used in the construction of some of the world’s biggest thrill rides but in recent years it is the steel market itself that has seen all the dips and climbs of a high speed rollercoaster.
 


As the global shipping industry went through a major build cycle between 2002-2007 demand for steel plate grew over 350%, placing a significant strain on existing mill capacity and driving prices and profitability higher and higher. However, the inevitable investment in new capacity that followed (around a 200% increase between 2002 & 2007) was followed by the global financial crisis and a major downturn in new ship orders, causing an estimated 85% drop in steel plate requirements between 2007 & 2009.


 
More recently, the conventional ship market has seen some recovery but is unlikely to reach the heady heights the world’s steel mills had in mind during their expansion. POSCO and Nippon Steel are both currently trading at 50% discounts compared to 2007 highs and, along with other major plate mills such as JFE and Dongkuk, are looking to align themselves with the offshore industry to revive their utilization.
 


On the surface this seems to make sense – the major Korean heavy construction yards of Samsung, Hyundai and Daewoo, buyers of steel plate, have shifted their strategic focus and backlogs significantly in recent years. In 2013 offshore orders accounted for c.60% of SHI revenues compared to just c.20% in 2007. For South Korean yards the offshore industry represents a more efficient, profitable and sustainable future. The problem is with offshore units needing 8-10 times less steel plate per $ of order value compared to conventional ships the country’s mills could well be steeling themselves for a rough ride.
 

 

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

Transocean: Fleet Update Summary

Transocean Ltd. today issued a monthly fleet update summary which includes new contracts, changes to existing contracts, and changes in estimated planned out-of-service

Navantia Orders Sedni IAS for PEMEX Flotel

Sedni secures an important contract with Navantia to supply its Automation System (IAS) Diamar for the flotel vessel (BAP) which is being built at Ferrol factory for PEMEX owner.

MN 100: Tidewater Inc.

601 Poydras Street, Suite 1500 New Orleans, Louisiana 70130 Telephone: 504 568 1010 E-mail: corth@tdw.com Website: www.tdw.com Chairman and CEO: Jeff Platt Number of employees: 8,

News

TOTE, Saltchuk Secure Financing for Marlin Class Vessels

Maritime Administration to Provide Title XI Loan Guarantee for World’s First LNG Containerships Today, the U.S. Maritime Administration (MARAD) announced a $324.

Transocean: Fleet Update Summary

Transocean Ltd. today issued a monthly fleet update summary which includes new contracts, changes to existing contracts, and changes in estimated planned out-of-service

Navantia Orders Sedni IAS for PEMEX Flotel

Sedni secures an important contract with Navantia to supply its Automation System (IAS) Diamar for the flotel vessel (BAP) which is being built at Ferrol factory for PEMEX owner.

Vessels

NOAA Orders Newbuild Navigation Response Boats

NOAA today announced that Lake Assault Boats of Superior, Wisconsin, will build two small vessels for the Office of Coast Survey's navigation response program,

Canada’s New Patrol Vessel Christened

Entry into service of Canadian Coast Guard's new mid-shore patrol vessel, the CCGS Caporal Kaeble V.C., was inaugurated by The Honorable Denis Lebel, Minister of Infrastructure,

Damen Delivers Tug to Bremenports

Bremenports, the management company for the twin German ports of Bremen and Bremenhaven, took delivery of its first Damen-built vessel – a Stan Tug (Stu) 1606.

 
 
Maritime Security Maritime Standards Navigation Offshore Oil Pipelines Pod Propulsion Salvage Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1700 sec (6 req/sec)