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Blame It on Oil: 2016 Unhappy New Year for Asian Shipyards

  • Customers cancel orders, push back delivery amid overcapacity
  • Pain in South Korea spreading to China, Japan and Singapore
An employee uses a welding torch while working on a ship under construction at the Hyundai Heavy Industries Co. shipyard.
Photographer: SeongJoon Cho/Bloomberg
Updated on

For many Asian shipyards, 2015 was a brutal year. This year could be even worse.

With oil prices forecast to fall as low as $15 a barrel and China’s growth slowing, orders for offshore projects and new vessels are hard to come by for Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co., the world’s three biggest shipbuilders. As the industry struggles with overcapacity and low rates, customers have been pushing back delivery schedules or canceling orders outright, a trend likely to continue this year.