By Yi Whan-woo
The shipbuilding industry has shown signs of bottoming out with the global market index pointing to an upturn, and Korean players receiving more orders from abroad.
According to London-based Clarkson Research Services, a total of 277 vessels were ordered in the first quarter of the year, up 39 percent from the same period in 2012 and 93 percent from 2011.
The new shipbuilding price index, which indicates market direction, has shown signs that the slump has stopped, remaining between 125 and 126. It stood at 125.6 in March and 126 in February. The index for 2011 and 2012 were 139 and 142.2, respectively.
“The data shows the price of newly-built ships has hit bottom,” said Kim Hyun, an economist at Shinhan Securities.
“It’s too early to say prices will bounce back, but it can be taken as an indicator that the long-term market trend has begun to recover.”
The economist added the demand for high performance vessels including oil drilling ships, liquefied natural gas (LNG) carriers, and container ships will rise as a number of countries are expected to begin investing in natural resources.
“It is expected Australia, Russia, and Southeast Asian countries will begin ordering vessels for oil as well as natural gas drilling in the second half this year,” he said.
The nation’s large and small shipbuilders have capitalized on a slow recovery on the domestic market by winning big orders from abroad.
On Monday, Hyundai Heavy Industries, the world's largest shipbuilder, said that it has clinched a $700 million deal to build five container vessels. In January this year, Hyundai Heavy also bagged a similar deal valued at $600 million.
So far this year, the shipbuilder has received orders valued at $9.7 billion to build ships and offshore facilities, achieving 41 percent of its yearly order target.
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.
Korean small and medium-sized shipbuilders also clinched record orders in the first quarter, for the first time in three years.
According to the Export-Import Bank of Korea, SPP Shipbuilding, Sungdong Shipbuilding & Marine Engineering, and six other small- and medium-sized shipyards won a combined 601,000 compensated gross ton (CGTs) in orders in the January-March period, the largest since the first quarter of 2011 when the comparable figure was 764,000 tons.
Their combined orders accounted for 23.4 percent of 2.56 million CGTs in total won by local shipbuilders, including industry leader Hyundai Heavy and other bigger rivals, the data showed.
The smaller shipyards' orders reached 24,000 CGTs in the first quarter of 2012 and 30,000 CGTs in the fourth quarter, data showed.