SEOUL: Daewoo Shipbuilding & Marine Engineering said on Monday it expected to win a 2 trillion won ($1.8 billion) order from A.P. Moeller-Maersk AS to build 10 container ships, confirming an earlier Reuters report.
The deal reflects growing confidence in the global container ship market, which has been on a solid growth track after the global financial crisis, and adds to a series of recent deals placed with the world's top shipyards.
The weekly Howe Robinson Container Index, which tracks the charter market for container shipping lines, has trended upward since hitting a bottom in December 2009, according to the Korea Maritime Institute.
Daewoo is also in talks with Maersk on an option to build an additional 10 ships with the capacity to carry 18,000 twenty-foot-equivalent containers, the largest available.
The option could bring the total value of the order up to $4 billion, the shipbuilder's largest-ever.
Maersk , the owner of the world's largest container shipping firm, will hold news conferences simultaneously in London and Hong Kong at 0930 GMT, it said earlier.
"While we believe the order indicates bullish long-term sentiment for containerised trade demand expectations from a major shipping line, we remain cautious, as this order alone would increase the global container ship order book by nearly 5 percent," said Michael Webber, shipping analyst with Wells Fargo Securities.
"We will continue to monitor developments in the order book, as we note that the sector has a propensity to overbuild."
Shares in Daewoo jumped 3.2 percent by 0430 GMT, beating a 0.5 percent drop in the wider market
Its Korean rivals are also eyeing large container ships with prospects for rising orders from global shippers amid a consumption pickup.
Hyundai Heavy Industries received an order to build six large container vessels in February, reportedly worth around $800 million. Last year, Samsung Heavy Industries also won an approximately $2 billion order for 20 container ships from Taiwan's Evergreen Group, which includes the world's fourth-biggest marine shipper Evergreen Marine.
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