Although investment in newbuilding commercial ship is still stagnant, there will be steady orderings seen in energy-related ship and offshore plant market.
Analyst Park Min of Korea Investment & Securities said on July 12, "With continued global financial crisis, tight ship financing market maintains. As such, newbuilding contract declines and owners having gained bargaining power ask for terms that are unfavorable to shipyards, regarding prices, payment structure, etc."
Park added, "Due to structural slump of shipping market, ship financing condition is getting tightened since global financial crisis in 2008. The period term of the loan has decreased to five to seven years from 12-15 years and loan to value ratio has been lowered to 60% from 90%, which means owners need more funds in the initial stage when placing an order."
Park said, "Nevertheless, ship financing majored banks will maintain to prefer offshore plant, drillship, LNG carrier market. Also, dependency on non-traditional direct financing (equity and bond) is expected to rise."