Shipbuilding orders expected in second half

Shipbuilding companies are vying for orders in the second half this year.
These companies, which enjoyed record-breaking orders in 2000 and orders for quality (read high-margin) than quantity last year, plan to obtain more basic orders this year as shipbuilding orders plummeted due to the deteriorating shipbuilding economy.
Hyundai Heavy Industries is falling short of its goal of 3.1 billion dollars with 1.41 billion dollars (36 vessels) worth of orders received by the end of August. HHI is planning to take orders for general ships as well as high-margin vessels such as CNG (Condensed Natural Gas) carriers and LNG carriers for the rest of this year in order to reach the goal. The strategy seems to be working for HHI as they succeeded in taking orders for 10 vessels (330 million dollars) including tankers and container vessels during the month of September.
An HMM insider said, “the fallout of the shipbuilding economy triggered by the 911 attacks altered the sales situation from last year, when we enjoyed all manner of orders. Though business isn’t exactly great, we have to get back to the basics and focus on getting base orders.”
Samsung Heavy Industry also fell short of its goal for orders worth 3 billion dollars. As of the end of September, it has only received order for 26 vessels worth 1.3 billion dollars. It, however, is expecting to meet goals more or less as it will likely succeed in getting orders for up to six LNG carriers sometime in mid October.
Daewoo Shipbuilding and Marine Engineering (DSME) was the best performer of the big three builders with orders for 17 vessels (1.32 billion dollars) by the end of August, or 60% of its total sales goal of 2 billion dollars. One DSME insider said that it will be difficult for shipbuilding to recover in the latter half this year due to global economic instability, the won’s depreciation, and declining ship prices. He added that there is no need for concern, “we have enough vessels on back order left to build.”