Korean shipbuilding industry is suggested that it is expected to see firm contracts for commercial vessel, with a possible increase in newbuilding price and offshore facility order momentum focusing on drillship and so on, in the second half of this year.
Analyst Jung Woo-Chang at Mirae Asset Securities of Korea said that Clarkson’s newbuilding price index increased by 1 point in the third week of July from the previous week to 128 point, showing the second increase in July following the first week. He added, “This is resulted from the newbuilding price recovery seen in containership and bulker, each accounts for 24% and 37% of total amount of commercial ships contracted.”
He prospected that the newbuilding price recovery would continue throughout the second half of the year as well, backed by Korean shipbuilders’ strategical switch to selective contract in line with their recovery of total amount of orderbook.
Jung said, “From my experience, among variables related to shipbuilding industry, newbuilding contract is the one seen to have the highest interrelationship with shipbuilder stocks with 0.77 coefficient of correlation,” and forecasted, “As macro uncertainties, such as Euro zone and etc., are being somewhat resolved, the oversupply of commercial ship market will be improved gradually from the second half with continued new order momentum.”