July 28, 2003

Korean shipbuilding orders surge
Shipbuilding orders won by South Korean yards surged to a high of 7.81 million compensated gross tonnage (CGT) in the first half of this year, more than double the orders received in the same period last year.

According to the Ministry of Commerce, Industry and Energy (MOCIE), Korean yards received construction orders for 233 ships worth $10.57 billion in the first six months this year, up 171.7 percent from the same period a year ago.

The orders won in the past six months already exceed the 230 ships (7.59 million CGTs) worth $10.04 billion that Korea's yards chalked up in the whole of last year.

The previous record was in 2000 when Korean yards received shipbuilding orders totaling 6.61 million CGTs.

"The sharp increase in shipbuilding orders is ascribed to the worldwide trend to strengthen regulations on outmoded vessels after the submergence of an outdated oil tanker in the Spanish waters last November, the favorable turn of the global shipping industry and increases in the issuance of shipbuilding orders as buyers tend to purchase ships before a shipbuilding price hike," MOCIE director Kim Kyung-won said.

Only one shipbuilding order, for an 818-TEU (twenty-foot equivalent unit) container carrier, was from South Korea and the rest of the orders came from overseas, reflecting the advanced technological competitiveness of local shipyards,said Kim Kyung-won.

High value added ships such as container carriers larger than 7,500 TEUs, liquefied natural gas (LNG) carriers and large passenger ferries, made up 18.5 percent of the orders in the January-June period, up from 10.5 percent in the same period last year.

Shipbuilding orders from European countries, which accounted for 72 percent of total orders in the first six months of last year, dropped to 66.7 percent this year, while orders from Asia, which last year accounted for 9.6 percent of entire orders, rose to 15.5 percent.

South Korean shipbuilders are now set to show stable growth over the next few years as their combined backlog of orders at the end of June amounted to 609 vessels (21.11 million CGT) worth $30.26 billion.

Korean vessel exports rose 22.8 percent to $6.17 billion in the first half, brightening the prospects that exports will surpass the goal of $10.8 billion set at the start of the year.

Construction for Korean account, however, dipped 2 percent in the first half to 120 vessels (3.8 million CGT), but in terms of monetary value, it rose by 10.6 percent to $5.61 billion.

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