The 15-year boom cycle is coming again
Choi Jin Myung, an analyst at CAPE Investment & Securities in South Korea, said: “It is time to think about when the shipbuilding industry will resume growth, rather than asking if there is a possibility of obtaining a new ship order. The 15-year boom cycle is about to come again. â€
Choi Jin Myung pointed out: "The boom cycle of the shipbuilding industry generally includes a five-year boom period and a 10-year recession period. Recently, ship rents and ship prices are at a favorable level, and the offshore equipment market has also sent a lot of good news. Therefore, Orders are expected to increase in the second half of 2017 and the first half of 2018."
He commented that according to the trend of the ship price index in the past 36 years, there will be a sharp increase in a cycle of about 15 years, which usually lasts for 5 to 6 years; therefore, investment in shipbuilding and shipping business needs to achieve profit within 5 years. And wait for opportunities in the next 20 years.
He pointed out that from 2016 to 2017, the stock price of the shipbuilding industry has risen sharply. However, this growth may be just the beginning. If it is the beginning of the big cycle, it will generate profits in the next five years.
Petropin Research, a well-known ship financing research institute in Greece, has also confirmed this point. PetrofinResearch believes that the worst time for the market is over, and the price of the ship is gradually picking up. The first areas of recovery are bulk carriers and container ships. It is expected that the oil tanker market will also see a moderate recovery next year. The value of tankers and container ships has also increased over the past few months. The Clarkson Ship Price Index has risen from an average of 75 points in 2016 to 88 points in May 2017, up 17.3% for the full year.
The increase in orders from Korean shipping companies confirms the overall recovery of the shipbuilding industry
A South Korean industry insider also said: "The growth of new ship orders this year reflects that the shipbuilding business that has bottomed out since 2014 is slowly rebounding and recovering. According to the current trend, the three major shipping companies in South Korea may receive more than 20 billion US dollars worth of new products this year. Ship order."
South Korea’s three major shipping companies received a total of about $7 billion in orders last year. Among them, Hyundai Heavy Industries Group (including its subsidiary Hyundai Tsuyoshi Shipbuilding and Hyundai Sanhu Heavy Industries) received a total of US$5 billion in 2016, and Daewoo’s shipbuilding orders were For 1.55 billion US dollars, Samsung Heavy Industries received only 520 million US dollars. According to the International Ship Network, this year, the total number of orders received by the three major shipping companies in South Korea has reached nearly 10 billion US dollars. Among them, Samsung Heavy Industries has received orders of 4.8 billion US dollars, equivalent to 74% of the annual target of 6.5 billion US dollars. Hyundai Heavy Industries Group received orders of US$3.8 billion in the first five months, more than half of the target of US$7.5 billion this year. Daewoo Shipbuilding received only $770 million in new ship orders this year, but compared with just $130 million in the same period last year, the number of orders received this year has also increased five-fold. Daewoo Shipbuilding’s annual order for this year is $5.5 billion. According to the current trend, the three major shipping companies in South Korea are expected to complete the target of 20 billion US dollars. Compared with last year's 7 billion US dollars, the total number of orders received by the Korean shipbuilding industry has increased substantially. The overall recovery of the shipbuilding industry can be said to have been basically established.
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