10 Orders in October
The Korean shipbuilding industry’s cumulative orders and order receipts fell by over 80% year on year in the third quarter of this year. Its order backlog dropped to its lowest level in 13 years, narrowing the gap with the Japanese shipbuilding industry.
According to a report by the Export-Import Bank of Korea on the Korean shipbuilding and shipping industries in the third quarter of 2016, cumulative orders for Korea's shipbuilding industry plunged 86.7% year on year to 1.25 million CGT in the third quarter of 2016. Orders received fell 87.2 percent to US$2.69 billion.
The report said that three vessel types -- oil tankers, product carriers, and liquefied natural gas (LNG) vessels -- accounted for more than 90 percent of the total but it is not quite meaningful as they were an unusually decreased number of orders that was significantly lower than the previous year.
Worldwide orders and the monetary value of the orders also dropped sharply. Cumulative worldwide orders in the third quarter were 86.6 million CGT, down 72 percent compared to the same period of last year, while the amount of orders slid by 63.1 percent to US$26.08 billion in the same period.
"This slump is blamed on a drop in demand for eco-ships caused by low oil prices, a shipping industry downturn due to an oversupply of bottoms and shipowners’ concerns and wait-and-see attitudes about changes in fuels for ships amid tightening environmental regulations," the report said.
By ship type, most ship types except for cruise lines suffered a severe demand downturn. Cruise ship orders hit a record high, accounting for 26 percent or one fourth of the total orders even though its proportion stood at one percent to eight percent in the new shipbuilding market in the past.
On the other hand, according to British shipbuilding and marine analysis agency Clarkson, the Korean shipbuilding industry chalked up 10 new orders in October. Global shipbuilding orders in October totaled 880,000 CGT (30 vessels), up by 210,000 CGT from 670,000 CGT in September. Italy, which landed orders to build three cruise ships, won the largest number of orders with 350,000 CGT, followed by Korea with 10 vessels (290,000 CGT). Korea’s Samsung Heavy Industries and Hyundai Heavy Industries won orders for six and four ships, respectively. China booked orders for 150,000 CGT (11 ships) and Japan recorded a 30,000 CGT order (one ship).
Korea's order backlog was the lowest in 13 years. As of the end of October, the order backlog of Korea was 21.53 million CGT, which dropped to the lowest level in 13 years and two months since the end of August 2003 (20.77 million CGT). China had 33.44 million CGT and 202.8 million CGT in order backlogs, respectively.
The gap between Korea’s and Japan’s order backlogs narrowed down to 1.24 million CGT at the end of October from 1.43 million CGT at the end of September. Amid the global recession, the worldwide order backlog in late October reached 91.35 million CGT, the lowest level in 11 years and 10 months since the end of December 2004 (88.74 million CGT).