South Korea's leading shipyards had the top three order backlogs among global shipbuilders at the end of 2017 due mainly to work received before the worldwide drop in demand, industry data showed Sunday.
According to Clarkson Research's latest World Shipyard Monitor, Daewoo Shipbuilding and Marine Engineering Co. (DSME) Okpo, Hyundai Heavy Industries Co. (HHI) Ulsan, Samsung Heavy Industries Geoje had the largest order books.
DSME's Okpo yard ranked No. 1 with 79 ships totaling over 5.63 million compensated gross ton (CGT) in outstanding work. HHI's operations came second by having 84 ships equal to little over 4.1 million CGT, and Samsung Heavy trailed in third place with 54 ships and 2.84 million CGT.
Following the "big three," China's Shanghai Waigaoqiao Shipbuilding Co. and Jiangsu New Yangzi Shipbuilding Co. came fourth and fifth with 2.51 million CGT and 2.37 million CGT, respectively.
Japan's Imabari SB Saijo, Hudong-Zhonghua Shipbuilding Co. of China, STX France SA, Germany's Meyer Werft GmbH and Italian shipyard Fincantieri Monfalcone finished in the top 10 in terms of orders they will fulfill going forward.
Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co., all affiliates of HHI, ranked 11th and 13th, respectively, in Clarkson's report.
Industry insiders said that South Korean yards also led the order book pack in late 2016, although with the exception of HHI, the size of the backlogs are falling. Samsung Heavy last year placed second in terms of backlog size ahead of Hyundai Heavy.
Shipbuilding orders that need to be met by HHI rose by 644,000 CGT in the past year, while DSME backtracked 913,000 CGT and Samsung Heavy decreased 902,000 CGT.
"South Korean yards were fortunate in getting their orders before the drop in demand for ships brought on by the slowdown in the global economy, but the situation is not all good at present," a source said.
He stressed local yards must continue to win new orders if they want to stay ahead of rivals.
Related to the need to secure fresh orders, HHI recently reported winning a US$220 million order for three liquefied petroleum gas carriers from Kuwait with Samsung Heavy and that its $3 billion contract for a floating production storage and offloading platform is moving forward on schedule for delivery in the second half of this year.
DSME has said it is working on a deal to seal a key contract in the coming weeks that may increase its workload.