With the summer holidays started at South Korean shipyards, it is anticipated that newbuilding market will remain a little subdued during the coming weeks, Clarksons said in a recent weekly report.
The leading researcher and shipbroker also mentioned that “the newbuilding story of the year has been dominated by high value business - with LNG, Container and Offshore sectors leading the charge.
Competition across these sectors has been fierce and with a much narrower pool of yards competing for the same business, buyers prepared to invest into high value assets, have been to realise competitive pricing, as a result of the competitive dynamic that exists between the yards.
Hyundai Heavy Industries and Samsung Heavy Industries are to face a much reduced level of profitability.
So whilst there is no doubt that the shipyards in South Korea have been successful in terms of maintaining productivity and certainly winning some high value and profile business - this has not been as profitable an endeavor as the market might assume.
This will certainly impact on how the pricing story will evolve in the 3rd and 4th quarters of the year - and whilst there will certainly be an interest from Seller's to continue to drive momentum into the market - this will be against a continued pressure to improve margin - and as to whether Buyers will be accommodate such a potential firming of values - this remains to be seen!” concluded Clarksons.