HHI may increase shipbuilding plate purchase with new orders

South Korean Hyundai Heavy Industries (HHI), the world's largest shipbuilder, recently announced that it won a number of large orders worth US$3.5 billion for 31 vessels in just a month, a shot in the arm for Chinese and Japanese shipbuilding plate makers. The strong new building orders in June and early July surpassed the orders of 24 vessels worth US$2.6 in March. The orders came from Greek, Israeli and European ship owners for four oil tankers and 27 container ships. The large container ship orders indicate that the container ship market, which tapered of temporarily in the second half of 2005, is expected to rebound. HHI's orders in 2006 so far include 76 ships worth US$8.5 billion. These orders are expected to keep the company occupied for more than three years. Shipbuilding plate demand of HHI will certainly increased thanks to strong ship orders. It has been heard that Chinese Baosteel has recently agreed with other shipbuilders except HHI in S. Kore for shipbuilding plate supplies in the third quarter with a price between $600-620/mt. On the other hand, due to strong competition in plate market, Japanese steelmakers had decreased their second quarter plate price for HHI by 15% to $580/mt in April. Furthermore, South Korean POSCO recently announced that it would gradually increase its plate production capacity. Besides, HHI has its own investments in China for shipbuilding plate production. The steel market in Asia has recently slowed down but it is expected to recover in the third or fourth quarter. Regardless, a sharp competition is expected among shipbuilding plate rollers for a stake in HHI's shipbuilding plate orders.