By Joo Kyung-don
SEOUL, Sept. 13 (Yonhap) -- Share prices of local shipbuilders are sailing higher following massive orders in recent months, analysts here said Friday.
Shares in Korea Shipbuilding & Offshore Engineering Co., which manages shipbuilding units of Hyundai Heavy Industries Group, closed at 122,200 won on Wednesday, up 26 percent from one month earlier. Samsung Heavy Industries Co. rose 19.7 percent on-month to end at 8,140 won, while Daewoo Shipbuilding & Marine Engineering Co. jumped 23 percent on-month to close at 30,300 won.
"The recent surge in shipbuilding shares is mainly due to the rising number of order intakes and speculation that the industry will further recover through the fourth quarter," Hwang Eo-yeon, an analyst at Shinhan Financial Investment Co., said in his report.
South Korean shipbuilders retained the top spot in global shipbuilding orders for the fourth straight month in August, industry data showed. They accounted for nearly 74 percent of orders placed worldwide last month by securing orders worth 735,000 compensated gross tons (CGTs).
In the first eight months of the year, South Korean shipyards logged orders totaling 4.64 million CGTs, which fell short of 5.02 million CGTs of orders clinched by Chinese shipbuilders. But in terms of the value of the orders, South Korean shipyards bagged orders worth US$11.3 billion in total in the January-August period, $370 million more than China.
Market watchers said South Korean shipbuilders will be able to keep their momentum going as demand for environmentally friendly ships, such as liquefied natural gas-powered ships, are rising ahead of a new International Maritime Organization (IMO) regulation. The IMO will implement a mandatory curtailment of sulfur oxide emissions on Jan. 1, 2020.
"It indicates that South Korean shipbuilders, who boast advanced technologies in eco-friendly ships, can expand their presence in the market," Han Young-soo, an analyst at Samsung Securities Co., said. "With the recovery of charter rates, vessel owners can purchase more ships. It's also expected that the offshore floating facilities market will recover."