Offshore Plant Orders to Grow
Shipbuilding industry is suggested to see offshore plant orders in the second half of this year that investment sentiment seems to become better.
Kim Seung-Churl, an analyst at Meritz Securities of Korea said, “The Korean Big3, Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries won $8.5bn contracts in total for offshore production facilities in the year to May,” and explained, “As the deep-water drilling facilities on order go under construction, orderings for production facilities will come after."
The analyst saw that although there are signs of weaker oil prices, demand for drillships and production facilities will maintain, saying “Big3 are still expected to win major orders for offshore plant."
Moreover, Kim said “Stock prices of shipbuilders declined due to lower newbuilding prices, earning shock seen in the first quarter and etc.,” and added, “Investment sentiment is likely to continue to improve with the expectation of an order rise in production facility toward the second half of this year and low valuation.”
“Clarkson’s newbuilding price index showed a month-on-month rise of 1% to 127p recently. It is hard to pre-judge the uptrend of the newbuilding price, it is such a comfort for it staying at the bottom,” the analyst added.