Newbuild prices soaring

Since the beginning of this year the price of new ships has jumped raising South Korean shipbuilders’ hopes of greater profits in the latter half of the year, industry sources said.

The price index of new ships reached 155 in January which is a record high since it hit 163 in 1991-1992 according to data released by Clarkson Research Studies.

The prices registered in January 1988 are used as the benchmark 100.

After a protracted lull in 2002 which saw the index hover at 105, costs have soared by 47.6% to reach the current high level.

The data shows that prices for a 300,000dwt VLCC is $118 million, up 85.8% from the end of 2002, while the price of a 170,000dwt bulk carrier has almost doubled to $66 million. The sharp hike is largely attributed to growing demand from world’s emerging shipping industry and the dramatic increase in raw materials such as steel plates.