Top S Korean shipyards post record profit, orders
Samsung Heavy Industries Co, the world's second-largest shipyard, reported record profit and Daewoo Shipbuilding & Marine Engineering Co, the third-biggest, set an all-time high for orders on booming demand for vessels.
Samsung Heavy said yesterday that net income in the April-June quarter more than quadrupled on contracts for oil and gas tankers. Daewoo Shipbuilding said contracts this month have reached US$4 billion, an industry record. Both companies are based in Seoul.
Shipyards in South Korea, the world's biggest shipbuilding country, will probably report all-time high earnings this year as they book contracts at record prices. AP Moeller-Maersk A/S, the world's largest shipping line, and its peers have spent more on vessels for about five years to move more raw materials to China and take away finished goods to the United States and Europe.
'Earnings are looking good for shipyards and ship prices will probably remain at record levels,' said Mo Jae Sung, who helps manage US$1.6 billion at Hanwha Investment Trust Management Co in Seoul. 'Samsung Heavy's announcement has raised expectations that earnings at others will also be very good. There are more new orders than what a lot of people had expected earlier this year.'
The two companies raised their targets for new contracts in 2007 by as much as 55 per cent earlier this month because of the strong demand for vessels that can carry containers, coal and other products.
Ship prices, rising since 2003, have gained as much as 26 per cent this year as economic expansion in China, the world's fourth-largest economy, increases demand for coal, oil and other goods, leading to the need for more new ships to transport them. That's helping South Korean yards to book record orders for a fifth consecutive year.
A shipbuilding price index that tracks the value of all types and sizes of vessels rose to 172.6 in June from 171.9 a month earlier, according to London-based Clarkson plc, the world's largest shipbroker.
The price of a very large crude carrier, the biggest of its type, rose about 80 per cent to a record US$137.50 million at the end of June this year from the end of 2003. The price of a vessel that can carry 147,000 cubic metres of liquefied natural gas has climbed by more than a third to US$225 million, according to Clarkson.
'Demand for vessels that can carry coal, LNG and containers as well as offshore platforms are expected to lead the market for new contracts in the second half,' said Lee Jae Won, an analyst at Tong Yang Merchant Bank in Seoul.
Samsung Heavy said yesterday that net income in the April-June quarter more than quadrupled on contracts for oil and gas tankers. Daewoo Shipbuilding said contracts this month have reached US$4 billion, an industry record. Both companies are based in Seoul.
Shipyards in South Korea, the world's biggest shipbuilding country, will probably report all-time high earnings this year as they book contracts at record prices. AP Moeller-Maersk A/S, the world's largest shipping line, and its peers have spent more on vessels for about five years to move more raw materials to China and take away finished goods to the United States and Europe.
'Earnings are looking good for shipyards and ship prices will probably remain at record levels,' said Mo Jae Sung, who helps manage US$1.6 billion at Hanwha Investment Trust Management Co in Seoul. 'Samsung Heavy's announcement has raised expectations that earnings at others will also be very good. There are more new orders than what a lot of people had expected earlier this year.'
The two companies raised their targets for new contracts in 2007 by as much as 55 per cent earlier this month because of the strong demand for vessels that can carry containers, coal and other products.
Ship prices, rising since 2003, have gained as much as 26 per cent this year as economic expansion in China, the world's fourth-largest economy, increases demand for coal, oil and other goods, leading to the need for more new ships to transport them. That's helping South Korean yards to book record orders for a fifth consecutive year.
A shipbuilding price index that tracks the value of all types and sizes of vessels rose to 172.6 in June from 171.9 a month earlier, according to London-based Clarkson plc, the world's largest shipbroker.
The price of a very large crude carrier, the biggest of its type, rose about 80 per cent to a record US$137.50 million at the end of June this year from the end of 2003. The price of a vessel that can carry 147,000 cubic metres of liquefied natural gas has climbed by more than a third to US$225 million, according to Clarkson.
'Demand for vessels that can carry coal, LNG and containers as well as offshore platforms are expected to lead the market for new contracts in the second half,' said Lee Jae Won, an analyst at Tong Yang Merchant Bank in Seoul.