It received orders for ships worth a cumulative value of $30 billion in 2012…accounting for 35% of all global orders.
Shipbuilding companies aim to obtain orders for ships in value of $58.8 billion this year.
Despite the slumping global shipbuilding market, the shipbuilding industry in Korea ranked first in sales in the world market last year. And shipbuilding companies in Korea are expected to receive more orders for high value-added ships, such as offshore plants and LNG carriers.
The Ministry of Knowledge Economy and Korea Shipbuilders’ Association said on January 15 that shipbuilding companies in Korea remain first in the world market ranking order (Korea accounted for 35% of all orders in volume) by receiving orders for 75 million CGT ($30 billion) in 2012. And, they said the top 10 shipbuilding companies in the country set the goal of receiving orders for ships worth $58.8 billion this year, a rise by 9% from that of last year ($54 billion).
The Knowledge Economy Ministry said that orders for high value-added ships, such as offshore plants and LNG tankers, are expected to continuously increase this year because many countries are actively carrying out marine resource development projects as the demand for energy grows across the world, though an increase in global orders for overall ships, including merchant ships, is not absolute due to uncertainty about the recovery of the world economy and the excessive supply of ships.
The Ministry predicted that it will be possible for Korea’s shipbuilding companies to achieve the goal for this year, leveraging their technologies and capabilities of building high value-added ships, such as offshore plants and LNG carriers, despite the adverse situation of the global shipbuilding market.
According to the Ministry, orders for ships reached 213 million CGT in 2012, a drop of 36.8% from the previous year, due to several reasons, including the continued depression in the shipping market caused by the global recession, difficulty in raising funds by ship owners due to shrunk shipping finances, and excessive supply of ships after the boom in the shipbuilding industry between 2005 and 2008.
While the volume of orders sharply decreased, backlogs were reduced by 28% as of the end of 2012 from the previous year as ships were built and delivered based on an agreed timetable.
And the ship-price index of newly built ships also continuously dropped to 125.9 (as of the end of November 2012), a fall of 33.7% from 190, the highest point marked in August 2008, due to the excessive supply and reduction in orders for ships.
Despite the slumping global shipbuilding market, the shipbuilding industry in Korea ranked first in the volume of orders by receiving orders for 75 million CGT in 2012 (a drop of 45.7% from the previous year), accounting for 35% of all global orders.
This volume is equivalent to $30 billion in export revenue, representing double the amount of sales in the shipbuilding industry in China that ranked second in the volume of received orders (71 million CGT worth $15.45 billion). Namely, shipbuilding companies in Korea appeared to be superior in constructing high value-added ships, such as offshore plants and LNG carriers.
In 2012, shipbuilding companies in Korea received an order for one of two global orders of LNG-FPSOs and won orders for all of the 4 LNG-FSRUs (with a value of approximately $1.2 billion). They also received orders for 73% of all LNG carriers (24 ships worth a value of approximately $4.9 billion) and 67% of all drill ships (26 ships worth about $9.3 billion), boasting their competitiveness in offshore plants and high value-added ships.
And the technology prowess of Korea’s shipbuilding companies was recognized by foreign ship owners as they have growing interests in highly fuel-efficient and eco-friendly ships, showing possibility of an increase in orders for green ships. Among tankers, the one delivered for Scorpio Tankers last year by Hyundai Mipo Dockyard saved fuel by about $5,000 (8 tons) a day.
Despite a decrease in orders in 2012, shipbuilding companies in Korea built ships in volume of 136 million CGT, a fall of 15.8% from the previous year. When changes in the volume of ships that received orders and the volume of built ships are reflected on, the volume of orders reaches 285 million CGT, a drop of 26.3% from the previous year.
The export revenue of ships reached $39.74 billion in 2012, a drop of 29.8% from the previous year, due to a decrease in overall ship prices and the volume of orders as ships ordered during the dull season after the global financial crisis in 2008 were delivered.
Given that shipping companies are affirmatively evaluating the economic efficiency of recently delivered merchant ships, the Knowledge Economy Ministry predicts that orders for merchant ships will increase when the shipping market rebounds and the shipping finance market is invigorated.
Particularly, orders for offshore plants at 4 major shipbuilders, including Hyundai Heavy Industries, DSME, Samsung Heavy Industries, and STX Offshore and Shipbuilding, targeted for this year reach approximately $27.2 billion (about 56% of total target) out of the total targeted order of $48.6 billion, driving an increase in orders targeted by shipbuilding companies.
Source: todayenergy
