As seasonal ordering peak of the second quarter has started, South Korean shipbuilders' share prices showed an upturn on April 18.
Analyst Kim Hong-Gyun, Dongbu Securities said, "Orderings for offshore drilling and production facilities and gas carriers will last in Q2, as well. Moreover, containership and car carriers are to be contracted."
Kim said, "Orders for several projects, such as Malaysian Petronas FLNG totalling $1bn, etc., are to be announced in early May. Besides, as around $13.2bn of offshore projects are scheduled during Q2, Korean major yards would likely to secure huge contracts."
Also, prospected earnings recovery has a positive impact on share prices. Kim said, "Five of listed yards' combined operation margin for Q1 is estimated to be around 5.6%, up from 5.3% in Q4 2011."
Added, "With iron-ore price falling, thick plate prices would accordingly drop. Unburdened pressures for rising raw material costs, yards seem to improve profits onwards."