LOW prices appear to be no incentive in raising orders large vessels from South Korean yards as orders dry up, reports Business Korea.
Industry insiders attribute the current situation to the local shipping finance system. '
According to Clarkson research, 291 postpanamax and larger containerships were outsourced worldwide between April 1, 2011 and March 31, 2014. Only five contracts were awarded by Korean companies.
Global leader Maersk started the competition back in 2011 when it placed 10 orders for 18,000 TEUers. The United Arab Shipping Company (UASC) then ordered six 18,000-TEUers and eleven 14,000 TEUers. Seaspan followed with fifteen 14,000 TEUers and twenty 10,000-TEU vessels.
Those in Asia are moving at a rapid pace as well. For example, the China Shipping Group has recently placed orders for nine 10,000 TEU and four 19,000-TEU vessels, and Singapore's Neptune Orient Lines awarded 10 contracts for 14,000-TEU ships.
Meanwhile, only Hyundai Merchant Marine placed five 13,100-TEU orders during the same period as a Korean shipping company, whereas Hanjin Shipping, the largest in Korea, ordered none.
An increasing number of governments, such as the Danish and Chinese governments, have provided large-scale funds for the industry in the form of direct loan and payment guarantees since the outbreak of the recent global financial crisis.
CMA CGM, for instance, returned as the world's third-largest shipping company thanks to US$150 million from the French government.
But the Korean government provides little support. "The establishment of the Shipping Finance Corporation has foundered and the foundation of the Shipping Guarantee Fund, one of its alternatives, is showing little progress," said Korea Investors Service analyst Song Min-joon.
Said the Korea Shipowners Association: "Our competitors are likely to be steps ahead from late this year, when the vessels will begin to be delivered one after another. Then, Korea's shipping industry will be facing even greater difficulties, unless there are some measures to turn the tables."
SHIPBUILDING
15 April 2014 - 03:22
Korean shipbuilding orders dry up, lack of state financing blamed
LOW prices appear to be no incentive in raising orders large vessels from South Korean yards as orders dry up, reports Business Korea.
SHIPBUILDING
15 April 2014 - 03:22
Korean shipbuilding orders dry up, lack of state financing blamed
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