According to Bloomberg Samsung Heavy Industries Co.
will more than double purchases of steel plate from China next
year because it can't get enough from suppliers in South Korea
The company will rely on China next year for 21 percent of the 5 millimeter- (0.12 inch) to 20-millimeter-thick slabs used to make vessel hulls, compared with 9 percent in 2006, Seoul- based Samsung Heavy said today in an e-mail.
Hyundai Heavy Industries Co.
, Daewoo Shipbuilding & Marine Engineering Co
. and Samsung Heavy, the world's top-three yards, are buying more steel to deliver 1,116 vessels on order, valued at a record $90.3 billion. Hyundai Heavy is also buying a 49 billion-won ($53 million) stake in a Chinese steelmaker to guarantee supplies at a lower cost and depend less on its main sources in South Korea and Japan.
The company has a preliminary agreement to buy 150,000 tons of the slabs from Shougang Group of China, bringing next year's purchases from the country to 250,000 tons.
Steelmakers have roughly doubled the price of steel plate since
2003 to about $600 a ton because of increased demand from shipyards and higher costs of iron ore used to make steel products
. Posco (PKX)
, South Korea's largest steel company
, and other Asian makers of the material are investing to increase output.