S. Korea's major shipyards suffer severe slump in new orders

Hyundai Heavy Industries Co., South Korea's leading shipbuilder, and its local rivals saw a major drop in orders in the first half of the year due to a protracted global economic slump, industry sources said Wednesday. The country's "Big 3" shipyards, including Samsung Heavy Industries Co. and Daewoo Shipbuilding and Marine Engineering Co., received a combined US$1.23 billion worth of orders in the first six months of the year, a sharp drop from $34.1 billion a year earlier.   Hyundai Heavy has not received a shipbuilding order in the past six months, though it has just won a $250 million order to build an offshore platform.   Daewoo Shipbuilding won $300 million worth of orders in the January-June period, while Samsung Heavy won a $680 million order to build an LNG storage facility.   Orders for new vessels have sunk since the third quarter of last year as the credit crisis and the subsequent global recession prodded companies to postpone delivery dates or cancel orders.   South Korea, home to seven of the world's top 10 shipyards, has clinched record-high orders in the past few years because of strong demand for crude carriers and offshore exploration equipment amid lofty oil prices.   But hit by the global economic crisis, demand for new ships fell 52 percent worldwide last year. Orders won by South Korean shipbuilders also fell 47 percent last year.   "We can cautiously expect new orders to be placed in the second half of the year," said Ahn Ji-hyun, an analyst at NH Investment & Securities. "But a meaningful recovery will not be possible until next year or 2011 because of overcapacity."   In an effort to quench the dry spell, local shipyards are bidding on contracts to build drill ships, semi-submersibles and other offshore platforms.   Hyundai Heavy and two other South Korean shipyards are bidding for contracts to construct Royal Dutch Shell Plc's floating liquefied natural gas production and storage unit, which will be the world's biggest and could be worth about $3 billion.