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| Published：2021.03.04 News Sources：Qingdao Gute Ship Supplies Co., Ltd. Views： | |||
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How is the new shipbuilding market going? The shipowner starts the game
South Korean ship companies completed more orders for new ships than expected in 2020, with annual orders amounting to $22 billion, well above the previous forecast of $15.8 billion. In particular, $11.4 billion of new ship orders were placed in the two months between November and December. In the New Year, the South Korean shipbuilding trio's "catch the single rally" continues. According to the latest statistics of the South Korean shipbuilding industry, in the first two months of this year, Hyundai Heavy Industry Group, Samsung Heavy Industry, Daewoo Shipbuilding, the three major shipbuilding enterprises, a total of new ship orders reached 5.26 billion US dollars, accounting for 17.3% of this year's operating order target of 30.4 billion US dollars. It was the best start for the three South Korean shipbuilders in four years. According to Clarkson's data, in the first two months of last year, the order volume of the three South Korean companies was only about $576 million, or about 5% of the total order volume, because of the epidemic. In 2018 and 2019, when shipbuilding conditions were still stable, the three Korean shipbuilders took 14.6 percent and 16 percent of orders in the first two months of the year, respectively. South Korean industry insiders expect the shipbuilding boom that continued in the first quarter of this year to slow somewhat in the second quarter. Lee Bong-jin, a researcher at Hanwha Investment & Securities, said: "Going into the second quarter, if shipbuilders' hand orders are better than last year and their dockyard schedule is relatively full, then the situation in the new shipbuilding market will change." In other words, with an increase in new ship orders, shipbuilders with a guaranteed work load in 2022 and an increased order book will be able to ask owners for a higher building price. According to Clarkson, South Korea's three biggest shipbuilders have 70% of their scheduled deliveries of new ships in 2022 compared with 2021. The 2023 delivery target is only 45% of 2021, but if the Qatari project, known as Big Fish, gets its LNG tanker orders, it will be equivalent to securing 80% of the volume. 
Low ship prices have long been a stumbling block to improving shipbuilders' earnings. For example, the construction unit price of the main LNG ship of South Korean shipbuilders is still at a low level. The unit price for the construction of 174,000 cubic meter class LNG carriers has remained between $180 million and $190 million for several consecutive years, after falling below the $200 million mark in June 2016. The new shipbuilding price index, a gauge of the global shipbuilding market, also remains low. The Clarkson New Shipbuilding Price Index rose one point from the previous month to 126 in December, but was down four points from 130 at the start of last year. Since 2008, when the global shipbuilding industry was in the super boom, the new shipbuilding price index reached more than 190 points. Due to the impact of the global financial crisis, the new shipbuilding price index has been on the decline, plummeting to 140 points in 2011. Since then, with the long-term weakness of the global economy, especially in Europe, the new shipbuilding price index has been in the range of 120~130 points. But as orders increase, shipbuilders, who already have a stronger backlog of orders, will have an advantage in negotiating shipbuilding prices with shipowners, and prices are likely to rise. South Korea shipbuilding industry analysts believe that the shipbuilding enterprises in order to ensure that next year's shipbuilding starts not to reduce, the lower price will now accept the early new ship orders, but as the growth of the workload, ship price will rise into orbit, Marine shipbuilding markets around the world will be centered on the supply side (yards) changes, so will appear the phenomenon. "At the end of the day, of course, ensuring the workload is more important than raising prices," Mr Lee said. There is no need for shipbuilders to force orders or demand higher prices from shipowners. Therefore, for shipbuilding companies, although the increase in ship prices will have a positive impact on the improvement of corporate earnings, but also can only expect. South Korea shipbuilding enterprise related personage analysis thinks: "if the hand-held order volume decreases, the ship price has no reason to rise. For now, rising ship prices will be a positive signal for South Korea's big three shipbuilders in the second half." "Shipbuilders will give priority to securing orders for 2022, but from the second quarter of this year, they will compete with shipowners on shipbuilding prices," Mr Li said. |
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