Hyundai Heavy fell 5.6 percent, the biggest drop in more than a month, to close at 355,000 won in Seoul. Cosco Corp. Singapore Ltd. (COS), the shipbuilding unit of China's largest shipping company, slipped 6.7 percent to S$3.08 in Singapore.
``Investors are worried shipbuilders may report slower earnings growth from the second quarter as higher material costs are fully reflected,'' said Feynman Jeon, an analyst at Daishin Securities Co. in Seoul. He rates Hyundai Heavy a ``buy.''
Steelmakers, including Nippon Steel Corp. (5401) and Posco (005490), are raising prices as they pay as much as 71 percent more for iron ore and other key ingredients. Hot-rolled steel in China, an Asian benchmark, rose 9.7 percent this year, according to data on Metal Bulletin.
Hyundai Heavy yesterday said operating profit, or sales minus the cost of goods sold and administrative expenses, rose 59 percent to a record of 639.6 billion won ($639 million) in the first quarter as it built more vessels at higher prices. That exceeded a median estimate of 563 billion won in a Bloomberg survey of 10 analysts.
Dongkuk Steel Mill Co. (001230), which provides a third of South Korea's demand for steel used in vessels, raised prices for the second time this year, to the highest in the country. Starting April 25, customers would have to pay 23 percent more at 1.01 million won a ton. Posco, Asia's third-largest steelmaker, increased prices by 18 percent to 785,000 won starting April 17.
Nippon Steel, the world's second-largest maker of the alloy, will raise wholesale prices for steel plates by 10 percent from June. The company last increased prices on April 1.
Hyundai Mipo Dockyard Co. (010620), a unit of Hyundai Heavy and the world's fourth-largest shipyard, fell 4.9 percent to 222,500 won in Seoul. Yangzijiang Shipbuilding Holdings Ltd. (YZJSGD), the first Chinese shipbuilder to trade shares in Singapore, dropped 3.6 percent to S$1.06 in the island city.
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