Korea Lands Record $33 Billion
Worth of Ship Orders in 1st Half 2007

Recent orders add to the four-year backlog of 43.82 mln ton

The domestic shipbuilding industry has landed shipbuilding orders worth $33.2 billion in the first half of this year, renewing a record high set during the same period of last year. The industry has already secured a four-year backlog of shipbuilding while making a feat of winning all orders on LNG carriers that were placed during the January-June period this year.
Kim Chang-kyu, director of Automobile & Shipbuilding Industrues Division at the Ministry of Commerce, Industry and Energy, said that Korean shipbuilders won orders on 364 ships with 11,320,000 Compensated Gross Tonnage (CGT) during the first six months of this year, representing a 38.2 percent surge on a CGT basis and a 51.3 percent jump to a record high of $33.2 billion on a value basis over the same period of last year.
Korean shipbuilders demonstrated a competitive edge in the LNG carrier sector by snatching 13 LNG carriers, all the orders placed during the first half of 2007.
A sharp rise in the value of orders landed by Korean shipbuilders is created to an upsurge in order unit price per CGT from $2,284 in the first half of 2006 to $2,933 in the first half of 2007, reflecting a surge in steel product prices.
Thanks to the increase in orders, the Korean shipbuilding industry has a four-year backlog of 1,346 ships with a combined 43.82 million ton worth $12.16 billion.
Korea saw shipbuilding tonnage climbing 12.1 percent during the first six months of this year over a year earlier and shipbuilding value surging to $11.5 billion due to the spread of on-land shipbuilding and mega-block shipbuilding methods and a boost in productivity based on amicable labor-management relationships.
In an effort to cope with an explosive surge in orders Korean shipbuilders landed, they are scrambling for ways to expand facilities. Samsung Heavy Industries is expanding its quay wall, while Daewoo Shipbuilding & Marine Engineering Co. (DSME) is importing a marine crane.
However, a slew of small- and medium-sized companies are rushing into the shipbuilding industry to capitalize on the booming shipbuilding industry, including shipbuilding blocks, raising a possible facility glut.
Hong Sung-in, a researcher at Korea Institute for Industrial Economics & Trade (KIET) told a seminar on future prospects of the booming shipbuilding industry, held on the same day that the shipbuilding industry is in an economic cycle, and a drop in future demand and a facility glut could cause a plunge in shipbuilding prices and cutthroat competition. Shipbuilding companies seeking to expand or build shipbuilding facilities need to secure international competitiveness through improving productivity and technology development, he noted. nw

Minister of Commerce, Industry and Energy Kim Young-joo (right photo). MOCIE Minister Kim speaks during an anniversary event for Shipbuilding Day.