Business | Shipping

Hyundai Mipo receives large new contract

Hyundai Mipo Dockyard Co, a unit of the world's largest shipbuilder, said a customer replaced container ships on order with other vessels amid a global decline in consumer goods demand.

  • Bloomberg
  • Published: 23:50 November 16, 2008
  • Gulf News

Hong Kong: Hyundai Mipo Dockyard Co, a unit of the world's largest shipbuilder, said a customer replaced container ships on order with other vessels amid a global decline in consumer goods demand.

The European client replaced six container ships with two chemical carriers and three liquefied petro-leum gas vessels, the Ulsan, South Korea-based company said in a filing today.

The new contract is worth 545.2 billion won ($391 million), $35 million more than the previous contract, it said.

Shipping lines face a decline in container rates because of oversupply of vessels and slowing demand for toys, computers and appliances amid a worldwide economic slowdown. Global trade may grow 4.1 percent in 2009, the slowest pace in seven years, the International Monetary Fund forecast on October 8.

"The change in the order shows how weak the container shipping market is," said Cho In Karp, an analyst at Good Morning Shinhan Securities Co in Seoul.

"This is good for Mipo because chemical and LPG carriers have better margins than container ships."

Hyundai Mipo gained 3.2 per cent to close at 129,000 won in Seoul trading before the announcement.

The stock has dropped 55 per cent this year, compared with a 43 per cent decline in South Korea's Kospi index.

The company received the contract in September last year to build eight container ships for 349.7 billion won.

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