Hyundai Heavy Industries could bring some cheer to the depressed global shipbuilding industry.
The South Korean company started work on what will be the biggest containership in the world – a 19,000 TEU vessel for China Shipping Container Lines.
Hyundai Heavy has a contract to build five of these ships for China Shipping by the end of the first quarter of next year. The one it has started work on is due for delivery in November, reported Dow Jones Newswires.
The new ship, with a deck the size of four soccer fields, will break the record set by Daewoo Shipbuilding and Marine, which has built several 18,270 TEU containerships for Denmark's A P Moeller-Maersk.
"Super large containerships are gaining popularity among shipping companies," said an official at Hyundai Heavy, adding that these ships are more fuel efficient.
Analysts expect Asian shipyards to be busier in 2014 than in recent years as the global economy continues its recovery, boosting cargo demand and encouraging shippers to increase rates.
Hanjin Shipping and Hyundai Merchant Marine, Korea's two biggest shipping companies, have raised their container shipping rates on Asia-Europe and Asia-North America routes twice in the past month following similar moves by global rivals such as Maersk and NYK Line.
A Hyundai Merchant official declined to say by how much the company has raised its rates. The Baltic Dry Index, which measures the cost of shipping commodities across key routes, jumped from a multi-year low of 698 at the start of last year to 2,277 in late December.
Analysts say the shipbuilding industry isn't out of the woods yet, even though Korean shipyards saw new orders nearly double last year.
Hyundai Heavy, the world's biggest shipbuilding company, said it is targeting US$29.6 billion in new orders this year, up 8.4 percent from $27.4 billion in 2013. Its two main rivals -Daewoo and Samsung Heavy Industries-also plan to raise their 2014 new order targets.
The three Korean shipbuilders have said they will focus on liquefied natural gas carriers and large-scale containerships this year.
"Korean shipbuilders' focus on super large containerships is the right strategy for them," said Han Young-soo, a Samsung Securities analyst. "Japanese and Chinese yards have steadily increased their global market shares, but still they are more focused on small ships, largely because of lack of technology."
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