Go to Contents Go to Navigation

Shipbuilders urge steelmakers to refrain from raising steel prices

All News 14:07 March 07, 2019

SEOUL, March 7 (Yonhap) -- Local shipyards called on steelmakers Thursday not to raise the price of thick steel plates used to build vessels until their businesses are back on track, claiming that any increase will lead to a burden they cannot cope with at present.

"Hikes in steel plate prices exert a considerable burden on the shipbuilding sector, whose business cycle is in the early stages of recovery," the Korea Offshore & Shipbuilding Association said in a statement.

"We strongly urge steelmakers to refrain from raising steel prices until shipyards are on a path to normalization."

According to the association, the price of steel plate has increased 300,000 won (US$266) per ton since 2016 and local steelmakers are moving to further increase prices this year.

The association estimates that an additional rise of 50,000 won per ton will cost local shipyards 255 billion won.

It said there were shipbuilding orders around the globe totaling 31.8 million compensated gross tons (CGTs) last year, up from the previous year's 28 million CGTs.

But the figure is still well below the six-year average of 37.25 million CGTs, it added.

Also, local shipyards built ships totaling 7.7 million CGTs last year, down 27 percent from a year earlier, with exports of vessels dipping 50 percent on-year to reach $21.2 billion.

South Korea is home to some of the world's biggest shipbuilders by sales: Hyundai Heavy Industries Co., Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co.

They have been struggling with reduced orders and rising costs for the past few years and have sold non-core assets and shed jobs to survive a prolonged slowdown in the shipbuilding industry.

Hyundai Heavy's shipyard in Ulsan, 410 kilometers south of Seoul (Yonhap)

Hyundai Heavy's shipyard in Ulsan, 410 kilometers south of Seoul (Yonhap)

sam@yna.co.kr
(END)

HOME TOP
Send Feedback
How can we improve?
Thanks for your feedback!