[Courtesy of Hyundai Heavy Industries]
SEOUL -- South Korean shipbuilders made desperate calls for a freeze in the prices of steel plates, saying they cannot endure any further hikes due to falling sales and profitability.
In a statement on Monday, the Korea Offshore and Shipbuilding Association urged steelmakers to keep the prices of thick steel plates for shipbuilding unchanged until shipyards head off their crisis. In the first half of this year, steelmakers raised thick steel plate prices by 50,000 won ($44) per ton.
"We will record the worst business results this year" if there is any fresh increase in the price of thick steel plates which accounts for up to 20 percent of shipbuilding costs, the association said, adding shipbuilders have endured price hikes in the past two years despite their difficulties.
Steelmakers have largely posted operating profits thanks to favorable market conditions, such as the restructuring of Chinese steelmakers, environmental regulations and increased demand, the association said.
For years, South Korean shipbuilders have been involved in sweeping restructuring to ride out a protracted business slump. In June, Hyundai Heavy Industries, the world's largest shipyard, decided to close its dockyard for offshore plants, admitting it has failed to win any orders due to competition with Chinese and Singaporean rivals.
reporter
Lim Chang-won
cwlim34@ajunews.com
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