Dongkuk Steel News

The Korean Register – an IACS member class society - signed an MoU with global steel producer Dongkuk Steel. The agreement paves the way for the two organizations to cooperate on the exchange of strategic technology relevant to the construction of seagoing vessels and platforms. Specifically, the agreement defines mutual cooperation for developing and surveying rolled steel used in the building of ships and marine structures.  It covers new domestic projects such as natural gas carriers, technical information sharing on technology trends, information sharing on future demand for steel including from international and domestic ship yards, joint studies into the approval and development of new steel types and KR’s third-party surveying of Dongkuk Steel’s products. www.krs.co.kr

According to a Reuters report, South Korea's third-largest steelmaker, Dongkuk Steel Mill, said on Dec. 1 it would cut prices of rebar by 11 percent to bring prices of its construction steel in line with that made by a rival. Its local peer Hyundai Steel said on Nov. 28 it would cut prices of rebar by 11 percent, its second price cut in a month, due to weakening demand from the construction sector and falling prices of raw materials such as scrap metal. (Source: Reuters)

Daewoo Shipbuilding & Marine Engineering, one of 's "big three" takeover targets, has been put up for sale. The other two prime takeover targets are Hyundai Engineering & Construction and Hynix Semiconductor, Chosun reported. The Korea Development Bank said it has begun searching for a manager to sell Daewoo Shipbuilding with an aim to select a preferred bidder by August. After Daewoo Group was dismantled in 1999, the shipbuilding business was managed by creditors. The business graduated from its debt workout program in 2001 and has since been managed by the KDB and the Korea Asset Management Corp., which hold a combined stake 50.4 percent. KDB holds 31.3 percent and KAMCO 19.1 percent.

South Korea's Dongkuk Steel seeks a consortium with other steel makers to buy Daewoo Shipbuilding and Marine Engineering, which has a market value of $9.4 billion. State-run Korea Development Bank and restructuring agency Kamco jointly own half the shipbuilder, a former unit of the bankrupt Daewoo Group. They are expected to put up their stake for sale this year. South Korean steel makers, including POSCO (005490.KS: Quote, Profile, Research), the world's fourth-largest steel maker, have said that they are interested in buying the shipbuilder but the high premium for the company could be a problem.

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.