Korea Shipbuilders Association News

According to Oh Kong-Gyun, Chairman and CEO of the Korean Register of Shipping (KR), the size of the Asian shipping and shipbuilding industries is such that they should occupy a more prominent and influential position in the international regulatory process than they currently do. Generating a louder voice for Asian shipping had been a central theme of Mr Oh’s recent IACS chairmanship and one that he is keen to continue now his tenure at IACS is complete. Oh was addressing an international forum of senior shipping people who had gathered to participate in SIMS, a Korean Register conference organised with the support of the Ministry of Land, Transport and Maritime Affairs, the Korea Shipowners’ Association, the Korea Shipbuilders’ Association and the Korea Marine Equipment Association.

After raking in almost 40 percent of global orders in 2000, South Korean shipyards plan to focus on boosting profit margins this year by being more selective in picking up orders, company officials and analysts say. The country's major shipbuilders are under no pressure to accept new orders as their backlogged orders are sufficient to keep their dockyards busy for the next two-and-a-half years. But officials at Hyundai Heavy, the world's largest shipbuilding firm, said that its profit margins would increase dramatically through rigorous requirements on new orders and other cost-cutting measures. Samsung Heavy and Daewoo Shipbuilding, two major world shipbuilders, said they would adopt similar strategies this year.

Yonhap reported that South Korean shipyards have unparalleled competitiveness despite recent challenges posed by Chinese shipyards, industry and government sources said. The optimistic predictions come as alarm bells have been sounded over Chinese yards outpacing domestic companies in shipbuilding orders received in the first two months of this year. Such developments have caused some in China to boast that it can become the world's number one shipbuilding country by 2015. The Korea Shipbuilders' Association (KOSHIPA) said China is competitive in relatively small-sized bulk carriers that are simple, low-tech and do not bring very big profits. These views were echoed by Park Dong-hyuk, executive vice president for production management at Daewoo Shipbuilding and Marine Engineering Co.

According to reports, Korean shipbuilders are forecast to enjoy an 18 percent increase in exports this year because of strong demand for high-priced ships and other products. The Korea Shipbuilders’ Association predicted Monday that local shipbuilders will log $26b in exports in 2007, up 18 percent from an estimated $22 billion in 2006. The country has recorded a sharp rise in shipbuilding exports over the past few years on the back of growing global orders for vessels to carry oil, gas and other products. The exports stood at $17.7b in 2005 after surpassing the $10b mark in 2003. Hyundai Heavy Industries, the world’s largest shipbuilder, predicts that its exports will increase to $9.2b, up from last year's $8b. Daewoo Shipbuilding and Marine Engineering, the No.

Shipyards of South Korea, are set to make efforts to develop offshore facilities in a bid to stay ahead of the field despite hot pursuit from rivals in Japan and China, an industry association said. Chief executives of the top three shipyards -- Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. -- have decided in a recent meeting to expand exports in the industry's maritime facilities business to $10b by 2015 compared from the current $800 million, the Korea Shipbuilders' Association said. Source: Yonhap

Shipbuilders and Japanese steelmakers are struggling to hammer out the differences on steel plate prices as the sellers insist on a 17 percent raise to $680 per metric ton. Korean shipbuilders including Hyundai Heavy Industries Co. are demanding a price cut from the current $580 to $480 per metric ton for the six months from October. "The talks (on price settlement) could go on until early October," said an official from the Korea Shipbuilders' Association. Steelmakers are pushing to lift prices in the face of rising material costs. Prices of iron ore, the key material for steel, continued to climb 17 percent this year, after jumping 71.5 percent in 2005 as a result of oligopoly trading by global iron ore miners and burgeoning demand from China.

South Korea's seven shipbuilders, which delivered 38 percent of the world's vessels in 2005, said they may raise the prices of new ships by about five percent to take advantage of record orders and protect their profits from rising costs, according to a report from Bloomberg. Higher prices protect shipbuilders' earnings from the Korean won's gains against the U.S. dollar and shield them from steel costs that have risen 70 percent since 2003. A third year of rising ship prices add to the costs of Taiwan's Evergreen Marine Corp. and other shipping lines which carry an estimated 90 percent of global trade. The price of a supertanker that can hold 2 million barrels of oil rose 4 percent to about $125 million in December, the Korea Shipbuilders Association said, citing Clarkson Plc.

Bloomberg has reported that South Korea's seven shipbuilders, which delivered 38 percent of the world's vessels in 2005, said they may raise the prices of new ships to take advantage of record orders and protect their profits from rising costs. Carriers of containers, oil and minerals may cost about 5 percent more this year, said Hyundai Samho Heavy Industries company officials. Higher prices protect shipbuilders' earnings from the Korean won's gains against the U.S. dollar and shield them from steel costs that have risen 70 percent since 2003. A third year of rising ship prices add to the costs of Taiwan's Evergreen Marine Corp. and other shipping lines which carry an estimated 90 percent of global trade.

According to the Korea Times, the next five years will provide an opportunity for Korean shipbuilders to construct cruise ships with a high-profit margin, the Korea Shipbuilders' Association said. The construction of luxury cruise ships declined steadily after the September 11 terrorist attacks on the United States. But with a recent favorable upturn, the market is expected to expand especially in the large and medium-size category through 2010, with an annual growth rate of about 5 percent, the association said. This prospect of stronger demand for cruise ships will offer local shipbuilders opportunities to venture into the construction of cruise ships with less risk. South Korea is the no.1 shipbuilding country in the world with aggregate exports of $17.6 billion last year.

The Ministry of Maritime Affairs and Fisheries (MOMAF) said that the Korea Shipbuilders's Association (KOSHIPA), comprising nine major Korean shipbuilders, would subscribe a fund for technical cooperation projects amounting to $100,000, in order to enable developing countries to advance their shipbuilding industries in the International Maritime Organization (IMO) arena. KOSHIPA plans to contribute $50,000 to the fund by the end of this year, and add more $ 50,000 as of early next year. The contributions will be deposited in the IMO/Korea Trust Fund, which was established in June 2003 in accordance with the memorandum of understanding and was designed to assist developing countries to implement the provisions of the international conventions.

According to Korea Times, South Korean shipbuilders’ demand for steel plates is expected to continue to rise next year due to an increase in orders, an industry body said Monday. The Korea Shipbuilders’ Association forecast the industry’s demand for steel plates will reach 5.4 million tons next year, up 300,000 tons from this year. Industry sources predict the demand for steel plates is likely to amount to 6 million tons by 2008, a steady increase from 4.6 million tons in 2004. South Korea, which dominates the industry’s global market, has the world’s top three shipbuilders: Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co., and Samsung Heavy Industries.

South Korean shipyards had won 1.7 million in compensated gross tons (CGTs) of shipbuilding orders during the first quarter of this year, down 32.6 percent from a year ago, the Korea Shipbuilders' Association said on Wednesday. It said in a statement ship construction by Korean companies in the January-March period was 1.85 million CGTs, up 24.1 percent from a year earlier. Shipbuilding orders fell as Korean yards, which were already fully booked for two and a half years, turned more selective in picking up new orders. Order backlog of Korean shipbuilders was 16.3 million CGTs at the end of March, against 13.4 million CGTs a year earlier, the association said.

The European Union's executive body proposed starting a World Trade Organisation (WTO) dispute against South Korea over alleged subsidies to its shipyards unless a deal could be reached by June 30. At the same time, the European Commission said it would propose allowing temporary government aid for European shipyards hit by South Korean competition for the duration of the WTO case. Both proposals will be discussed by EU industry ministers who meet on May 14 and 15. "Although we have not closed the door to an amicable solution with the Korean authorities, the clock is now ticking," EU Trade Commissioner Pascal Lamy said. The Commission…

Combined orders received by South Korean shipbuilders totaled 12.72 million gt for 227 ships in 1999, up 127.2 percent from a year earlier, according to the Korea Shipbuilders' Association said. New orders received in December alone totaled 3.71 million GT for 66 ships, the association said in a statement. Ships completed in 1999 amounted to 9.48 million gt for 163 ships, up from 7.28 million gt for 143 ships a year earlier, it said. South Korea's backlogged orders at the end of December totaled 24.19 million gt for 390 ships, the association said.

Korean Ship Orders Up 322% New orders received by South Korean shipbuilders in February totaled 1.26 million gt, up 322.7 percent from the same month a year earlier, provisional figures from the Korea Shipbuilders' Association showed. Orders received in January-February period totaled 2.32 million gt for 37 ships, up 232.1 percent from the same period a year ago. Korea received orders for 21 new ships in February. Ten ships, totaling 718,000 gt, were completed during the month. A total of 27 ships, worth 1.67 million gt, were completed in the first two months of this year, down from 1.93 million GT for 35 ships in the same period a year ago.

South Korean shipyards are expected to win about 75 percent of an estimated 48 orders for liquefied natural gas (LNG) carriers this year, industry officials said on Wednesday. "There are virtually no rivals to compete with Korean shipbuilders in making LNG carriers in terms of price and quality," said Yoo Jae-won, a spokesman for the Korea Shipbuilders' Association. Surging demand for environmentally friendly LNG was expected to raise the number of LNG carrier orders to around 48 this year from only 14 last year. "Korean shipbuilders are poised and look likely to grab most of the orders," Yoo said. Daewoo Shipbuilding and Marine Engineering, the world's second-ranked yard, said its LNG orders totalled 10 ships worth $1.7 billion so far this year, with options for 12 more.

New orders received by South Korean shipbuilders fell 30.3 percent in the first eight months of this year from a year earlier, according to provisional figures from the Korea Shipbuilders' Association. Orders in the eight-month period totaled 4.58 million gt for 94 ships, compared with 6.58 million gt for 116 ships in the same period a year earlier.

New foreign orders received by South Korean shipbuilders fell 15.7 percent in the first nine months of this year from a year ago, provisional figures from the Korea Shipbuilders' Association show. Orders in the nine-month period totaled 5.8 million gt for 110 ships, compared with 6.9 million gt for 121 ships in the same period a year earlier. New orders received in September alone totaled 1.2 million gt for 16 vessels. It did not give comparable 1998 figures. Backlogged orders at South Korean shipbuilders stood at 19.4 million gt for 310 ships at the end of September versus 19.4 million gt for 309 vessels a year earlier, the association said.

New orders received by South Korean shipbuilders dropped 6.7 percent in the first 10 months of this year from a year ago, provisional figures from the Korea Shipbuilders' Association showed. Orders in the 10-month period totaled 7.98 million gt for 145 ships, compared with 8.56 million gt for 145 ships in the same period a year earlier, the association said. New orders received in October this year totaled 2.18 million gt for 35 vessels, it said. Ships completed in the January-October period amounted to 7.96 million gt for 140 ships this year, up from 6.36 million gt for 127 ships in the same period a year before, the association said. South Korea's backlogged orders at the end of October totaled 21.18 million gt for 336 ships, it said.

New orders received by South Korean shipbuilders in January totaled 1.06 million gt, up 165 percent from the same month a year earlier, provisional figures from the Korea Shipbuilders' Association showed. South Korean shipbuilders received orders for 16 ships in January. Orders received in January last year totaled 400,556 gt for four ships. Ships completed in January were down from the same month a year earlier. Approximately 17 ships totaling 956,081 GT were finished, compared to 23 vessels at 1.22 million gt. South Korea's backlogged orders at the end of January amounted to 24.3 million gt for 389 ships, against 20.4 million gt for 314 ships a year earlier.

New orders received by South Korean shipbuilders in January totaled 1.06 million gt, up 164.7 percent from the same month a year earlier, provisional figures from the Korea Shipbuilders' Association showed. South Korean shipbuilders received orders for 16 ships in January, the association said. Orders received in January last year totaled 400,556 gt for four ships, it said. Ships completed in January were down from the same month a year earlier. Seventeen ships totaling 956,081 gt were finished, compared to 23 vessels at 1.22 million gt, it said. South Korea's backlogged orders at the end of January amounted to 24.30 million gt for 389 ships, against 20.35 million gt for 314 ships a year earlier.