Daewoo to pass on steel price increases

Daewoo Shipbuilding & Marine Engineering (DSME) may increase newbuilding prices this year to pass on higher steel-plate costs to customers. “The increase will be a small one,” chief executive officer Nam Sang Tae told reporters last week in Seoul, without giving more details.

Steelmakers including Posco and Nippon Steel Corp. plan to charge more for products including plates used to make ship hulls as they will probably have to pay as much as 71 % more for iron ore. Dongkuk Steel Mill Co., seller of almost a third of the steel used by South Korean shipyards, raised prices 13 % to 820,000 won ($826) a tonne this month.

Ship prices in 2008 will probably rise for a sixth year in a row after falling to a 10-year low in 2002 and 2003, according to London-based Clarkson. Shipyards in South Korea, the world?s biggest shipbuilding nation, are adding new docks and extending the length of existing ones to clear a backlog of deliveries stretching into 2012. They won almost half of the record $189.8 billion shipping lines spent on new vessels last year.

DSME will be adding its fourth floating dock next year but doesn?t have plans to add new dry docks.