South Korean Shipbuilders Receive Requests to Postpone Deliveries of 24 Vessels

Upon facing the increasing debt crisis in Europe, South Korea’s key shipbuilders have received requests to postpone deliveries of 24 ships worth approximately $3 billion. The stock market’s shipbuilding subindex has dropped by 40% over the past six months versus a 10% fall in the overall market.

The fifth-biggest by order value, STX Offshore & Shipbuilding, agreed to delay mainly European deliveries of 11 ships worth 1.5 trillion won ($1.3 billion). A spokesman for STX Group, a parent firm of the shipbuilder, explained that there could be further order delays.

Macquarie Securities expects that about 30% of global orders for dry bulk ships would be postponed this year. This figure is expected to reach 40% in 2012.

Daewoo, Korea’s second biggest shipbuilder, had to put off the delivery of 13 ships worth 1.6 trillion won ($1.4 billion) from an Asian and an European customers. However, Daewoo said that the delays were caused by the client’s preference changes related to the vessels.

The greatest fear is that the global shipbuilding industry could once again face a period of reduced orders and requests for delaying deliveries as it did in 2008.

[mappress]

Shipbuilding Tribune Staff, December 7, 2011; Image: stxons