Daewoo Shipbuilding expects 2012 orders to drop on oversupply
Daewoo Shipbuilding & Marine Engineering Co. , the world’s second-largest shipbuilder, expects new orders to drop 23 percent next year as shipping lines struggle with an oversupply of vessels and falling rates, Bloomberg reports. New contracts worth $11 billion may be signed in 2012, a decline from $14.3 billion of orders received this year, Seoul- based Daewoo Shipbuilding said in an e-mailed statement today. Demand for offshore products, such as drill ships, may make up about 70 percent of the orders next year, it said.
Orders for new vessels may slow as falling rates from excessive capacity have caused shipping lines, including China Cosco Holdings Co. and Neptune Orient Lines Ltd., to report losses this year. To offset that, South Korean shipbuilders are focusing more on offshore units, whose demand may rise next year as oil reserves at existing fields run out.
“We expect demand to focus more on offshore units while the commercial vessel market will be very difficult next year,” Daewoo Shipbuilding’s Chief Executive Officer Nam Sang Tae said in the statement. “We are hoping things will look better in 2013.”
The shipbuilder plans to invest 500 billion won ($435 million) in 2012 to meet growing demand for offshore products, which will include replacing a smaller floating dock to a bigger one, the company said. The company also plans to focus on getting more defense orders after Daewoo Shipbuilding won South Korea’s biggest overseas contract from Indonesia last week.
Orders for new vessels may slow as falling rates from excessive capacity have caused shipping lines, including China Cosco Holdings Co. and Neptune Orient Lines Ltd., to report losses this year. To offset that, South Korean shipbuilders are focusing more on offshore units, whose demand may rise next year as oil reserves at existing fields run out.
“We expect demand to focus more on offshore units while the commercial vessel market will be very difficult next year,” Daewoo Shipbuilding’s Chief Executive Officer Nam Sang Tae said in the statement. “We are hoping things will look better in 2013.”
The shipbuilder plans to invest 500 billion won ($435 million) in 2012 to meet growing demand for offshore products, which will include replacing a smaller floating dock to a bigger one, the company said. The company also plans to focus on getting more defense orders after Daewoo Shipbuilding won South Korea’s biggest overseas contract from Indonesia last week.
