Shipbuilding orders likely to rebound

A global survey has found that falling global shipbuilding orders have hit bottom after a five-year depression.

According to Clarkson, a global shipping and shipbuilding market information provider, 277 new shipbuilding orders were reported in the first quarter of this year, which is a 93 percent increase from the same period in 2011 and a 39 percent increase from 2012.

The new shipbuilding price index, another indicator to gauge the market direction, stopped falling from November last year, hovering between 125 and 126. The index stood at 126 in February and 125.6 in March, the researcher said.

The flattening off of shipbuilding orders for the first three months signals a bottoming out in that the shipbuilding orders had continued to fall for the past three years between 2010 and 2012,” said Kim Hyun, an analyst from Shinhan Investment.

“In particular, demands for LNG tankers, offshore production facilities and container ships, where Korea has a competitive edge, are slightly rising this year.”

The nation’s leading shipbuilders are still suffering from a lack of orders, but they continued to win shipbuilding orders in the first quarter.

Hyundai Heavy Industries said Tuesday that it had won a $700 million deal to build the world’s largest container ships for China Shipping Container Lines.

In January, the company also bagged a $600 million deal to build five container ships for Seaspan of Canada.

Samsung Heavy and Daewoo Shipbuilding & Marine Engineering, the other of the top three shipbuilders in Korea, performed better than Hyundai Heavy in offshore construction orders.

In April, Samsung Heavy Industries won a $900 million order to build four LNG vessels from Bonny Gas Transport, a shipping unit of Nigeria LNG.

DSME won an order to build a platform to produce crude oil and gas worth $1.1 billion last February.

Industry watchers predicted that orders to build offshore gas facilities from emerging markets would increase from the latter part of the year.

“Korean shipbuilders have improved their technology in fuel efficiency and emissions reduction amid the economic downturn, which will give them an upper hand in bids for shipbuilding orders, if global demand picks up,” Kim said.

Despite rising optimism about shipbuilders, however, some industry leaders remained unconvinced, saying that shipbuilding activities could remain slow if the fall of the yen against dollar continues, and that smaller shipbuilders could continue to suffer more than the big players due to a lack of orders.

By Seo Jee-yeon  (jyseo@heraldcorp.com)