S. Korean Shipbuilders Calling for Price Hike

Daishin Securities said Korean shipbuilders are asking for a rise in shipbuilding prices on several models and whether it will be accepted will be decided late this year. South Korean shipbuilders are reportedly trying to adjust upward their shipbuilding prices by 10% to 16% on bulk carriers in order to offset rising costs in steel plate and foreign exchange rates. Large backlogs of orders also encouraged them to request a price hike.
If accepted, shipbuilders would improve in profitability from fiscal 2012 when current orders are booked as sales, the securities company said.
The price increase might benefit other smaller shipbuilders or rivals in China but ship owners are expected to come back to South Korea’s major shipbuilders late this year, when they will have no other option but to accept or decline the request.