Shipbuilders are more likely to contract in low-margin, facing with tougher competition for securing new order in 2012. Also, increase in share prices would be limited due to newbuilding prices of VLCC, bulker, etc., in decline.
Analyst Yum Dong-Eun from HMC Investment Securities of South Korea said, "As global freight cargo keeps declining by Eurozone financial crisis and global economic trouble, it is hard to expect market recovery."
Yum added, "Big3 as well as medium-size builders would focus on securing larger amount of new orders than rather be selective."
Then medium-size yards would directly meet with profit slide by their low-margin new order and shrinking orderbook.
Due to continued new order at a low ebb during H2, Clarkson Newbuilding Price Index recorded the lowest in December at 139p, down by 1p on November.
Clarkson Newbuilding Price Index had soared up to 190p in 2008, then sharply decreased to 136p after global financial crisis, which recovered a bit to 142p in early 2011.