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S. Korea: Shipbuilder order books filling fast in first months of 2021

Shipbuilders have received far more orders so far this year than they did last year.

Korea Shipbuilding & Offshore Engineering (KSOE) announced Tuesday it recently signed 1.36 trillion won ($1.2 billion) of orders to build 12 ships for five different shipping companies.

The orders were signed on two days — May 28 and May 31 — the company said.

With the latest orders, the company has achieved roughly 72 percent of its annual target, which is $14.9 billion of orders.

Orders signed through the end of May have already exceeded all 2020 orders.

Including the latest contracts, the company has orders to build a total of 120 ships and offshore plants for $10.8 billion. The figure is already 15 percent larger than last year’s total orders for 106 ships and offshore plants costing $9.4 billion.

Among the 12 ships ordered, five are liquefied natural gas (LNG) carriers, which are considered high-value-added ships for the technical difficulty in building them.

The delivery of the ships will be completed by the first half of 2024, the shipbuilder said.

Samsung Heavy Industries announced Tuesday that it won orders to build four container ships worth 529 billion won for an unnamed Asian shipping line.

With the latest order, the company has secured orders to build 48 ships worth $5.9 billion, which is 65 percent of its $9.1 billion target for the year.

In 2020, the company signed $5.5 billion of orders. Orders in the first five months are already 7.2 percent higher than last year’s orders.

“With the world economy on track to recovery, there are inquiries for ships of all kinds,” a spokesperson from KSOE said.

According to shipbuilding and shipping market tracker Clarksons Research, global orders for ships this year totaled 17.95 million compensated gross tonnage (CGT) as of the end of May. That is already 83 percent of the orders full-year 2020.

CGT is commonly used in the shipbuilding industry as an indicator of the amount of work that is necessary to build a given ship.

“In the future we plan to focus on choosing orders that are more profitable,” the KSOE spokesperson said.

“There hasn’t been a year since 2014 when orders inked by local shipbuilders during the year surpassed their production capacity,” said Kim Hyun, an analyst from Meritz Securities. “For the first time in 8 years, shipbuilders are likely to win orders that meet or even exceed their annual production capacity.”

The Newbuilding Price Index released by Clarksons Research has been on the rise for six months as shipbuilder dockyards fill up. This means newly built ship prices are on the rise.

As of the end of May, the index was at 136.1 points, up from November’s 125 points. The price index is the highest since the 137.8 points recorded in December 2014.
Source: Korea JoonAng Daily

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