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Korean ship builders to increase steel purchases
By Kyunghee Park |
January 10, 2009, Saturday
|
Print Edition
Print Edition
HYUNDAI Heavy Industries, the world's largest ship builder, and two South Korean competitors are to raise steel purchases by at least 11 percent to a record, bolstering Asian steel makers reeling from the global recession.
Hyundai, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering will buy at least 7.8 million metric tons of steel plates to make hulls this year, the world's three largest yards said.
The Korean orders may support earnings at Asian steel makers after demand from car makers and builders dropped, Bloomberg News said.
Japan's Nippon Steel may double planned output cuts amid the recession, executives said yesterday.
"Demand from shipyards is basically the only bright spot for steel makers this year because supply still lags demand," Kim Yong Soo, an analyst at SK Securities, said in Seoul. "For ship builders, it's going to mean higher costs."
Steel is the single biggest material cost for shipyards.
Hyundai Heavy fell 2.4 percent to 219,500 won (US$165.8)and Samsung Heavy slipped 0.6 percent in Seoul trading.
Samsung Heavy plans to increase steel purchases by 20 percent to 1.8 million tons, a spokesman said.
Daewoo Shipbuilding said it would buy 2 million tons this year, 33 percent more than last year. Hyundai Heavy will buy more than the 4 million tons ordered in 2008, said a spokesman.
The Korean shipyards are fulfilling orders won in 2006.
The three yards, with US$135 billion of contracts for vessels and deep-sea platforms, are maintaining orders even as rivals fail.
C&Heavy Industries, a South Korea ship builder, is seeking protection from creditors to avoid bankruptcy.
"Everyone seems to agree that it'll be tough" through the first half of 2009, Kim Tae Hoon, vice president of Hanjin Shipping Co said in Seoul. "We are hoping the market will start to pick up slowly from the second half."
Hyundai, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering will buy at least 7.8 million metric tons of steel plates to make hulls this year, the world's three largest yards said.
The Korean orders may support earnings at Asian steel makers after demand from car makers and builders dropped, Bloomberg News said.
Japan's Nippon Steel may double planned output cuts amid the recession, executives said yesterday.
"Demand from shipyards is basically the only bright spot for steel makers this year because supply still lags demand," Kim Yong Soo, an analyst at SK Securities, said in Seoul. "For ship builders, it's going to mean higher costs."
Steel is the single biggest material cost for shipyards.
Hyundai Heavy fell 2.4 percent to 219,500 won (US$165.8)and Samsung Heavy slipped 0.6 percent in Seoul trading.
Samsung Heavy plans to increase steel purchases by 20 percent to 1.8 million tons, a spokesman said.
Daewoo Shipbuilding said it would buy 2 million tons this year, 33 percent more than last year. Hyundai Heavy will buy more than the 4 million tons ordered in 2008, said a spokesman.
The Korean shipyards are fulfilling orders won in 2006.
The three yards, with US$135 billion of contracts for vessels and deep-sea platforms, are maintaining orders even as rivals fail.
C&Heavy Industries, a South Korea ship builder, is seeking protection from creditors to avoid bankruptcy.
"Everyone seems to agree that it'll be tough" through the first half of 2009, Kim Tae Hoon, vice president of Hanjin Shipping Co said in Seoul. "We are hoping the market will start to pick up slowly from the second half."
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