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  Korea Report - March 2021
  Author : Hwang & Co     Date : 21-04-07 15:45     Hit : 4511    
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KOREA REPORT - MARCH, 2021.

Nine major global IBs, including Barclays, BoA-Merrill Lynch and Citi, forecast SKorea's 2021 economic to grow 3.6% this year, according to Korea Center for International Finance on 9th. UBS offered highest growth projection of 4.1%, followed by JP Morgan with 4% and Goldman Sachs with 3.8%. International Monetary Fund on 26th sharply raised its growth outlook for SKorea this year from 3.1% in Jan to 3.6%, citing robust exports and the country's fiscal policy support amid the pandemic.

SKorea recorded trade surplus of $4.17 bil in March, up 16.6% on-year, on the back of solid demand for chips and autos. Exports rose 18.3% on-year to $53.8 bil and imports rose 18.8% on-year to $49.6 bil. Exports of chips increased 8.6% to reach $9.51 bil, the highest reading in 28 month. It marked 11th consecutive month of trade surplus.

For the first quarter this year, Korean Big3 have taken firm grip on incoming new order rally. They are showing strong recovery from the order draught in recent years. Especially, should note their strong presence in high value-added ship sector such as gas carriers and VLCCs. As more and more regulations are coming to effect, demand for high-specification ships will increase, which will give the Big 3 even stronger market share. Korean shipbuilding industry has continuingly seen an increase in its new order intakes since the end of 2020 mainly in line with rising newbuilding price. According to industrial source, the price of 174K cbm LNG carrier has recently reached $188 mil level, up by $1.5 mil compared to a record posted in Feb. In addition, prices of VLCC and Suezmax tanker have seen $1.5 mil upturn each, while Aframax tanker price increased about $500,000. In containership sector, the price of vessel has reportedly risen by $1 mil.

As global newbuilding orders are increasing, the builders are in a position to increase price of the ships. Last Dec, a reputable local yard (hungry for new orders) gave its long standing clients chance to take their unsold berths with attractive terms to build feeder vessels. Only one owner decided to take the bargaining chance in time to build one ship, others decided to wait and see. Early this year, remaining owners jumped in for securing the berths, but only to find the price sharply increased (11%). Even with the increased price, owners are eventually placing orders, believing that the price will move up higher.

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