Korean yards plan to raise ship prices

Korean shipbuilders, including the world?s largest yard Hyundai Heavy Industries, may increase ship prices to an all-time high to compensate for rising steel costs. London-based shipbroker Simpson, Spence & Young said that Hyundai?s rivals have raised prices of newly built container ships by about 25% in the past year. Royal P&O Nedlloyd NV may have to pay Hyundai a near-record $127 million a ship to build four 8,000 TEU boxships.

Posco, Korea’s largest steel maker, raised the price of steel plates used to build ships 9.7% last week after producers agreed to pay 71.5% more for iron ore this year. Shipyard steel costs may rise further with SSY stating that “Firming newbuild prices values in February continued into March and we surely expect the cost of steel plates to rise. This will maintain the upward momentum for newbuild prices.”

Demand for container ships is also helping yards to increase prices. Royal P&O, COSCO and other container lines are ordering new ships for delivery in 2008 to cope with anticipated growth in global trade, led by China.