Hyundai Heavy Industries Co., the world’s biggest shipbuilder, plans to raise prices as demand for fuel-efficient vessels helps it skirt the global supply glut hurting Chinese yards.
Orders may exceed this year’s target of $11.3 billion, with about 60 percent of that already met, Ka Sam-hyun, executive vice president in charge of ship sales, said in a July 3 interview. The Ulsan, South Korea-based company plans to raise prices in the second half, he said.
“The big focus right now is on fuel efficiency,”Ka said. “At a time when prices have fallen so much, shipping lines seem to be willing to pay a bit more to get better performing ships on time. This is why the top-tier shipyards will benefit.”
Hyundai Heavy’s optimism helped drive up shares of Korean shipbuilders today and contrasts with gloom over Chinese shipbuilders. A third of China’s yards may shut down in about five years as they struggle to win orders, an industry group said last week. South Korean yards, which have dominated the construction of mega ships, are benefiting as lines including A.P. Moeller-Maersk A/S order bigger, fuel-efficient vessels.
Hyundai Heavy climbed 4.5 percent to 186,500 won at 10:17 a.m. in Seoul trading, paring this year’s drop to 23 percent. Hyundai Mipo Dockyard Co. surged 6.5 percent. Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. also rose.
China Rongsheng Heavy Industries Group Holdings Ltd., plummeted 16 percent in Hong Kong trading, extending its loss after plunging to a record low in the previous trading session in Hong Kong. The country’s biggest yard outside state control is seeking government financial support as orders and prices decline and may post a loss in the first half, it said July 5.
About 483 shipyards in China won $10.5 billion worth of orders in the first six months of this year, while 94 builders in South Korea got $18.5 billion, according to Clarkson Plc, the world’s biggest shipbroker. Chinese yards, which dominate bulk- carrier construction, won 21.2 million deadweight tons of orders in the first half compared with 16.6 million tons for Korean companies, according to Clarkson.
(Bloomberg)
