Samsung Heavy Lands Orders for 19 Vessels

Samsung Heavy Industries said Friday that it has signed contracts worth 1.7 billion dollars to build 10 large container vessels and nine oil tankers.

The company said it won orders for 10 units of 8,000 TEU container vessels from Evergreen of Taiwan for 103 million U.S. dollars per unit and nine oil tankers for 670 million dollars from a Southeast Asian shipping company.

As a result, Samsung has secured orders for a combined 51 vessels worth five billion dollars this year, or 63 percent of its new order target of eight billion dollars for 2010.

The company has landed orders for 8,000 TEU-class container vessels since July 2008, a world first. The shipbuilding industry is interpreting the orders as a sign of recovery in the container vessel market after those of bulk carriers and oil tankers. The resumption of orders for container vessels, which carry manufactured goods, could herald recovery of the real economy.

The container vessel market came to a standstill following the onset of the global financial crisis in September 2008, but its recovery has drawn keen attention. The freight index, the barometer of the conditions of the container vessel market, has gained nearly 80 percent from early this year.

The price of an 8,000 TEU-class container vessel was 86 million dollars per unit early this year according to shipping services group Clarksons. With Evergreen`s order for 103 million dollars per unit, the price is also growing.

Freight volume has surged on routes linking Europe and North America, leading to a shortage of large-scale container vessels. So more shipping companies say this is right time to place orders before ship prices go up.

buddy@donga.com