New orders to behave, until next year

Korea Shipbuilders’ Association (Koshipa) chairman and Hyundai Heavy Industries (HHI) president Choi Kil-seon said in an interview with local media that new ship orders would resume in the second half of next year as global financial market stabilizes. He also stressed that shipbuilding restructuring should be carried out by market forces, and shipbuilders and shipping companies should take win-win strategy.
“As shipping market slump continues amid global economic downturn, shipowners are now reluctant to order new ships,” Mr Choi said.
“Particularly, the European owners, who are our main customers, are having difficulty in securing financing due to tight-money situation in their own countries and they find it hard to place newbuilding orders for the present.”
He also forecast that orders drought would be resolved from the latter half of 2010 when monetary stringency is expected to ease while object-economy recovering.
Mr Choi said commercial ship sector would continue to suffer this year due to a variety of market situations.
However, he reckoned that there would be order receipt opportunities in the offshore sector, saying, “In offshore sector, South Korean shipbuilders exceed rivals of other countries in technology, yard facilities and human resources. Order intakes from the sector would mitigate the impact of rare merchant ship orders to some extent.”
Meanwhile, regarding the trend of shipowners requesting newbuilding order cancellation and delivery delay, Mr Choi said, “Indeed, some owners are requesting order cancellations. They are having difficulties securing financing for ships on order. I believe government supports such as the expansion of ship financing and shipbuilding financing are required to help the owners get funds and make sure the ships on order be completed.”