Hyundai Heavy plans to raise prices
Korean builders get a shot in the arm from growing demand for fuel-efficient vessels
Hyundai Heavy Industries, the world's biggest shipbuilder, plans to raise prices as demand for fuel-efficient vessels helps it skirt the global supply glut hurting Chinese yards.
Orders might exceed this year's target of US$11.3 billion, with about 60 per cent of that already met, said Ka Sam-hyun, executive vice-president in charge of ship sales. The South Korean company planned to raise prices in the second half, he said.
The big focus right now is on fuel efficiency. At a time when prices have fallen so much, shipping lines seem to be willing to pay a bit more to get better-performing ships on time
"The big focus right now is on fuel efficiency," Ka said. "At a time when prices have fallen so much, shipping lines seem to be willing to pay a bit more to get better-performing ships on time. This is why the top-tier shipyards will benefit."
Hyundai Heavy's optimism helped drive up shares of Korean shipbuilders yesterday and contrasts with gloom over Chinese shipbuilders. A third of China's yards might shut down in about five years as they struggled to win orders, an industry group said last week. Korean yards, which have dominated the construction of mega ships, are benefiting as lines including Moeller-Maersk order bigger, fuel-efficient vessels.
Hyundai Heavy climbed 3.4 per cent while Hyundai Mipo Dockyard leapt 4.9 per cent. Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering also rose.
"News about ship prices rising is lifting shares of shipbuilders," said Lee Jae-won, an analyst at Tongyang Securities.
