After years of struggling with dwindling orders, the South Korean shipbuilding industry is showing signs of recovery with a steady rise in orders, according to Yoo Kwang-yeol, first senior deputy governor of the Financial Supervisory Service (FSS), as quoted by Yonhap news agency, at an annual conference in Busan.
The South Korean shipbuilding industry is hit by an oversupply of vessels combined with low oil prices and a decrease in new orders in the last years, as a result from global economic downturn in 2008 and Chinese competition.
Yonhap news agency has earlier reported that, in 2015 alone, the country’s top three shipyards, Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering, suffered a combined operating loss of 8.5 trillion won.
In view of these, the financial regulator now said that there seems to be a boost in orders and urged shipbuilding companies to turn to high-end vessels, such as very large crude carriers, for business opportunities.
Furthermore, in July, the government will launch the Korea Ocean Business Corp. to create synergies in marine finance, he informed, while new technologies, including autonomous navigation systems and unmanned ships, are expected to help the national industry to achieve this turnaround. South Korean shipyards are estimated to have won orders of 3.23 million compensated gross tons this year, up 96% from the previous year.
Busan needs to effectively use marine finance infrastructure, as well as ensure its stronger presence as a marine finance hub city by focusing on paradigm changes in the industry.
In early 2018, the three biggest South Korean shipyards, comprising HHI, SHI and DSME, have set higher order goals for 2018, in line with expectations for an overall improvement in the shipbuilding sector.