South Korea’s top three shipbuilders Kore Shipbuilding and Offshore Engineering Co. (KSOE), Samsung Heavy, and Daewoo Shipbuilding could increase shipbuilding rates to compensate for Q2 operating losses of a total of around KRW1.5tn ($1312027050/mt), mostly due to increased steel prices.
The companies are in talks with the country’s steel giants, including Posco and Hyundai, who are reportedly demanding a 64pc hike in steel prices in H2 from the first half owing to the high cost of raw materials like iron ore.
KSOE, an entity of Hyundai Heavy Industries, incurred an operating loss of KRW897.3bn in the last quarter compared to a profit of KRW92.9bn in the prior year period.
Samsung Heavy reported a quarterly operating loss of KRW437.9bn. The company attributed the loss to a hike in steel plate prices.
Shipbuilders are keeping a close eye on sales in the upcoming quarters as they have acquired orders for 245 vessels in H1, which accounts for almost 90pc of their annual order targets.
($1 = KRW1143.27)