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

News

Port Workers in Argentine Grain Hub End Strike

Port workers in part of the Argentine grains hub of Rosario lifted a work stoppage on Friday, only a day after they went on strike over demands for higher year-end bonuses, a union official said.

Madsen to Chair Norway’s Research Council Executive Board

Henrik O. Madsen appointed chairman of the executive board of the Research Council of Norway   DNV GL president and CEO Henrik O. Madsen was appointed as chairman

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

Vessels

Damen Outfitting First of Nine Bahamas Patrol Boats

The first of nine Damen Stan Patrol 3007s ordered by the Royal Bahamas Defense Force has arrived at Damen Shipyards Gorinchem in the Netherlands for outfitting.

MARAD Publishes US ATB, ITB Database

The U.S. Maritime Administration (MARAD) released what it is calling a first-of-its-kind public database that chronicles U.S.-flagged, privately owned domestic

New Chinese Shipyard Launches First Ship

The new shipyard facility of Honghua Offshore Oil & Gas Equipment Company in Jiangsu, China, has launched its first ship, an IMT982 Platform Supply Vessel. The vessel,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Navigation Offshore Oil Pipelines Port Authority Shipbuilding / Vessel Construction Sonar
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: 0.1949 sec (5 req/sec)