Koreans close orderbook

As shipowners try to place newbuilding orders ahead of expected price rises, Daewoo and Hyundai have closed their books, as their current backlogs will keep the yards busy to 2003. Both yards say that 2003 is too far ahead to quote for newbuildings.

Daewoo has over 80 merchant vessels (totalling $4.5 billion) on the book and this rises to 127 vessels ($5.9 billion) if offshore and military ships are included. Hyundai has around 110 vessels on the orderbook and says prices have been going up for the last two months.

Samsung says its orderbook is full to the beginning of 2002 but it has some deliveries already scheduled for 2003 and 2004. The company says the yard is profitable and it recently secured orders for 20 containerships although it was unsuccessful in its bid to build the SeaFrance vessel.

As the won strengthens and Korean yards fill capacity, newbuilding prices are set to rise and Daewoo expects around 10% increase by the end of the year. While the stronger won will hit profits, Mr K L Joo from Daewoo London office says the yard has been profitable for the last 10 years and continuing productivity gains should keep it in profit.