SEOUL, KOREA - Shipbuilding shares rose across the board on the news that an emerging shipping alliance was rejected by the Chinese authorities. On June 19, Daewoo Shipbuilding & Marine Engineering was closed at 26,400 won, up 2.13 percent from the previous day. Other shipbuilding shares such as Hanjin Heavy Industries (4.36%), Hyundai Mipo Dockyard (2.83%), Samsung Heavy Industries (1.67%), and Hyundai Heavy Industries (0.55%) all increased.

 

Given the shipbuilding shares have languished over concerns of poor financial performances since early this year, the latest rebound is highly unusual. Stock analysts attributed the rise to the recent news on the 17th that the Chinese Ministry of Commerce refused to approve the P3 Network, a long-term operational vessel sharing agreement proposed by Maersk Line, Mediterranean Shipping Company, and CMA CGM.

 

Kim Hong-gyun, Dongbu Securities analyst, said, "Among top containership operators, there will be competition going on to take high-efficiency larger ships as much as possible. In that case, the big-three Korean shipbuilders capable of building ultra-large vessels over 18,000 TEU will benefit."