Conditions in the global shipbuilding industry have been constantly deteriorating, causing strong domestic shipbuilders to lower their annual targets for orders one after another.
Conditions in the global shipbuilding industry have been constantly deteriorating, causing strong domestic shipbuilders to lower their annual targets for orders one after another. Samsung Heavy Industries disclosed on Tuesday that it planned to win $10 billion worth of orders for vessels, which is a 33.3 percent downward adjustment from the $15 billion set as the company"s target in 2008. Daewoo Shipbuilding and Marine Engineering, which had marked $17.5 billion as its targeted amount for orders last year, set its annual target at "more than $10 billion." In other words, it has lowered its Maginot Line by around 42.8 percent from the preceding year.
Hyundai Heavy Industries has yet to finalize its target for orders this year, but the dominant view in the industry is that the amount will be lowered considerably from the target put forth a year ago
?It is likely that the target will be reduced as market conditions are unfavorable this year,? said a HHI official.
The three major shipbuilders, widely known as the "Big 3," are thought to be lowering annual targets despite their top technical skills because of tightened conditions in the global shipbuilding business.
Conditions in the shipbuilding sector are in fact harsh as the Clarkson Index, which soared to as high as190 in September last year, has dropped to stand at 172 as of January 9. However, unlike smaller shipbuilders that are hovering between survival and shutdown, there is also the aspect that the leading shipbuilders have strategically chosen to set up conservative business targets.
In other words, rather than going out of their way to compete for orders by lowering ship prices at a time when there are not many orders for ships around the world, the top shipbuilders seek to concentrate on securing major orders while taking a breather for the time being.
Another reason the three major shipyards can take the time to "adjust their tempo" comes from the aspect that they have already secured work for the next three years and therefore do not face an immediate impact in sales even if the volume of orders is light.