STX rebuffs dumping criticism

STX Offshore & Shipbuilding’s recent order-intake for the construction of eight 50,400-dwt tankers (options for four units included), worth $340m ($42.5m per ship), has caused price controversy.

Jo In-gab, Lee Jong-hwan, researchers with Shinhan Securities, said, “STX O&S has won the orders at the newbuilding price in line with current Clarkson Newbuilding Price Index which was not being accepted by South Korean large shipbuilders.”

“Shipowners’ request for price cut would grow in the second half as order drought goes on.”

The newbuilding price STX O&S accepted is some 20% lower than $53.5m quoted last August. Industry players are attacking the move as a dumping order receipt. They worry that the lowered price could lead to similar price cut in other ship types as well.

Against this, an STX official said, “We have succeeded in breaking order drought which started from last October. Steel plate prices have plummeted more than 30% and STX’s global shipbuilding system has helped raise production efficiency. It was not low-price order receipts.” All shipbuilding costs and profitability were considered and the advance payments are high as they account for 30% of the entire ship prices, he added.