Shipyards rebound but uncertainties continue

SEOUL-- Stocks of South Korean shipyards, led by Hyundai Heavy Industries Co., rebounded Wednesday, ending their declines for the past few days, but uncertainties still lie ahead over whether they will be able to secure new orders, industry sources said Wednesday.

Hyundai Heavy traded at 152,500 won (US$135) on the Seoul bourse as of 2:15 p.m., up 1.67 percent from the previous session's close but the gain still marks a sharp drop from its yearly high of 187,500 won reached in mid-June.

Samsung Heavy Industries Co., another major shipyard here, has fallen more than 20 percent in the past weeks. The shipyard traded at 10,850 won on the Seoul bourse, up 2.83 percent from the previous session's close. Its marks a drop from a 52-week high of 13,800 won in mid-June.

Analysts said local shipyards have secured a slew of new orders in the first half of the year but recently clinched fewer deals, stoking concerns that they may face a drop in new orders down the road.

More recently, the drops in their stock prices accelerated after losing a mega deal to Chinese rivals.

Earlier data showed that local shipyards are estimated to have clinched a third of new shipbuilding orders in the first half of the year, with their combined tally more than doubling from a year earlier.

"Market sentiment has subdued on concerns that their new orders may be smaller than expected in the future," said an analyst asking not to be named. "But it is too early to say that such a scenario may unfold."

Hyundai Heavy and other local shipyards bagged orders worth a combined 2.56 million compensated gross tons (CGTs) in the January-June period, accounting for 34 percent of the total orders placed around the globe, according to the data compiled by industry tracker Clarkson Research.

The new orders mostly centered around oil tankers and LNG carriers.

"Another thing is that their order backlog is constantly waning," said Eum Kyong-ah, an analyst at ShinYoung Securities. "An increase in new orders is key to their performance."

Source: Yonhap News Agency

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