Hyundai Heavy jumps most in seven weeks
SEOUL: Hyundai Heavy Industries Co., the world's largest shipbuilder, jumped the most in seven weeks in Seoul trading after Hapag-Lloyd AG increased a container-ship order by about $754 million, Bloomberg reported..
The shipping line expanded the capacity of six on-order ships to 13,200 boxes and ordered four additional vessels of the same size, it said in a statement on its website yesterday. The move boosted the order value to $1.45 billion from 793.9 billion won ($696 million), Hyundai Heavy said today.
STX Offshore & Shipbuilding Co. also rose after the company and an affiliate won a $912 million ship order from another STX Group company.
Demand for new vessels has rebounded this year as trade recovers from the global recession and as shipping lines prepare for the completion of work to widen the Panama Canal.
"The order news helped lift shares of shipbuilders today," said Song Jae Hak, a Seoul-based analyst at Woori Investment & Securities Co.
"The recent rise in vessel orders and prices, as well as increasing orders in non-traditional shipyard areas like power plants, have brightened the outlook for shipbuilders next year."
Hyundai Heavy, based in Ulsan, South Korea, rose 6 percent to 406,000 won as of 12:27 p.m. That's the biggest intraday gain since Oct. 25. The benchmark Kospi index rose 0.3 percent.
STX Offshore jumped as much as 9.4 percent, the most since Nov. 17, to 23,800 won. The company and its Dalian, China shipyard will build 20 vessels to carry wood pulp for STX Pan Ocean Co., the shipbuilder said in an e-mailed statement today.
Daewoo Shipbuilding & Marine Engineering Co., the world's second-biggest shipyard, rose 3.9 percent to 31,950 won.
Hapag-Lloyd will use its 10 vessels, due for delivery from mid-2012 to the end of 2013, on Far East routes, it said in its statement.
Work to widen the Panama Canal, which will allow larger vessels to use the waterway, is due to be completed in 2014.
In a separate news item, Nissan Motor Co. and Mitsubishi Motors Corp. will set up a 50-50 joint company next year to develop minicars for Japan to help boost sales, expanding an alliance under which the companies supply vehicles to each other.
The two automakers will create a new minicar to be sold in 2012, while Nissan will supply a light van and wagon to Mitsubishi in Japan. Mitsubishi will sell a sportutility vehicle to Nissan in the Middle East, the automakers said today in a joint statement.
"This agreement is important for Nissan as it supports our expansion in emerging markets, meets immediate capacity needs overseas, and enables us to grow our minicar business in Japan," Nissan Chief Executive Officer Carlos Ghosn said in a statement.
The partnership gives the manufacturers greater economies of scale while allowing them to enter market segments with minimal investment. The two carmakers already cooperate by supplying minicars, with engines no larger than 660cc, and commercial vehicles.
Nissan currently produces the Lancer Cargo commercial vehicle for Mitsubishi, which in turn builds the Minicab, Town Box, eKWagon and Pajero Mini models for the larger carmaker.
Mitsubishi Motors plans to build Nissan's Navara pickup truck at its factory in Thailand and the automakers are evaluating a plan to collaborate on manufacturing and engineering for a new one-ton pickup, they said today.
Nissan shares gained 0.3 percent to 809 yen at the 3 p.m. close of Tokyo trading. Mitsubishi Motors surged 8.5 percent to 128 yen, the biggest gain since Dec. 3, 2009. The press statement was released after the markets closed in Japan.
Moreover, Hyundai Heavy Industries, Korea's leading shipbuilder, has reported a couple days ago that a record amount of overseas voltage transformer orders with 1.4 trillion won ($1.2 billion) so far this year.
The company said that with 200 billion won in orders in November alone, the total amount marked a 30 percent increase from a year earlier as it became the first Korean company to exceed $1 billion in annual orders.
The company's most recent orders came from the United Kingdom, where it signed a deal worth 130 billion won to supply equipment for U.K.-based National Grid, which will include the delivery of 400 kilovolt capacity transformers between 2012 and 2016.
Hyundai is also hoping to win orders for 40 transformers that would be supplied to National Grid's U.S. division in Boston, and expects orders to exceed 1.5 trillion won this year, which is a five-fold increase from 2006.
For the Indian market, which the company entered for the first time this year, Hyundai has won orders to supply more than 100 extra high-voltage transformers with 765 kilovolt capacity. The company is expecting more orders from India.
"Our orders are increasing every year because we have operated for more than 30 years in the overseas transformer market in North America, Europe and the Middle East, which has made us known for good quality and service," said a Hyundai Heavy official.
"When our Alabama facility is finished in 2012, our global transformer production lines in Korea, the United States and Bulgaria will allow us to enter the global top three."
Since entering the business in 1978, Hyundai has exported its transformers to 70 countries. Company officials added that the company currently ranks within the global top five in terms of large-capacity transformers. -PB News