Samsung Heavy Paces Gains in Yards on China Accident (Update1)
By Kyunghee Park
June 2 (Bloomberg) -- Samsung Heavy Industries Co., the world's second-biggest shipbuilder, paced gains in South Korean shipyards in Seoul on expectations they will attract orders after an accident at a Chinese yard last week halted production.
Samsung Heavy rose 2.7 percent to close at 44,000 won, the highest since Nov. 15, in Seoul. Daewoo Shipbuilding & Marine Engineering Co., the world's third-largest shipyard, climbed 3.6 percent to 48,500 won.
Hudong-Zhonghua Shipbuilding (Group) Co., a unit of China's biggest shipyard, said on May 30 that two 600-ton cranes collapsed, killing three people and injuring two. The company hasn't given details on lost production time or costs.
``It will probably take six months to a year to get those cranes replaced and it will be inevitable that vessel deliveries will be delayed,'' said Lee Jae Kyu, an analyst at Mirae Asset Securities Co. in Seoul. ``Delays will hurt the creditability of the Chinese yards and could prompt shipowners to look to rivals in Korea.'' He rates South Korean shipbuilders ``overweight.''
Cranes
The cranes are used to move blocks, or steel structures that make the hulls of vessels, to docks. They are also used to load heavy parts into ships under construction. China State Shipbuilding Corp., parent of Hudong-Zhonghua, fell 0.9 percent to 101.03 yuan in Shanghai.
Hudong-Zhonghua is the world's 11th-largest shipyard with a backlog at the end of April of 2.42 million compensated gross tons, a measure of ship size and the material and time required for production, according to London-based Clarkson Plc, the world's largest shipbroker.
The Shanghai shipyard is one of the most advanced among Chinese shipyards, having built a liquefied natural gas carrier and vessels that can carry about 8,000 20-foot containers, said Kang Young Il, a Seoul-based analyst at Korea Investment & Securities Co.
STX Shipbuilding Co., owner of a shipyard in China's Dalian, climbed 3.9 percent to 42,200 won in Seoul. Hyundai Heavy Industries Co., the world's largest shipbuilder, advanced 2.1 percent to 383,000 won.
Keppel Corp., the world's biggest maker of oil rigs, gained 1.8 percent to S$12.32 in Singapore after winning a $537 million order to build a semi-submersible rig from Ensco International Inc. on May 30. Sembcorp Marine Ltd., the world's second largest, rose were unchanged at S$4.61.
To contact the reporter on this story: Kyunghee Park in Hong Kong at kpark3@bloomberg.net
Last Updated: June 2, 2008 05:32 EDT
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