Tokyo: Shipbuilders may be drawn into a global price war next year triggered by South Korean discounting, an executive at Mitsui Engineering & Shipbuilding Co., Japan's second-largest builder of vessels, told Bloomberg.
"A risk of some new Korean yards setting very low prices is our biggest concern," Norio Nagata, the head of the company's ship and ocean project division, said in an interview in Tokyo. The possible price cuts to fill idle docks could lead to global discounting, he said.
Shipping lines have postponed or canceled vessels as demand dropped amid the recession. Bulk carrier prices have declined as much as 30 percent from levels before the economic slump and a global fleet oversupply may continue for six years, boosted by the expansion of Korean and Chinese yard capacity and weak demand, Nagata said.
"Things will be extremely tough until 2015," he said. "The most important thing is how quickly we will respond to a rapid change in the business environment."
Japan lost its title as the world's largest shipbuilding nation to South Korea in 2000. Six years later, China overtook Japan as the second-largest shipbuilder by new orders.
Excess shipping capacity across the world will peak in 2012 before returning to growth as early as 2015, Nagata said. [31/08/09]
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