HYUNDAI Mipo Dockyard's earnings will continue to struggle through 2014 because of its difficulties in raising prices for new orders, a South Korean shipbuilding analyst predicted today.

Feynman Jeon, who covers South Korean shipbuilders for Daishin Securities, expects sales from HMD's shipbuilding division to fall in 2013 from 4 trillion won ($3.76Bn) a year earlier, although commercial vessel orders are growing.

He explained: vessel price increases will be limited because the shipbuilding market is a buyer's market now. Hyundai Mipo Dockyard's earnings will continue to struggle through 2014.?

HMD's net profit for 2011 was 200Bn won, a 59.4% drop from the 493Bn won profit for 2010.

Jeon estimates HMD's 2012 profit will drop 34.5% year on year to 131Bn won. He thinks earnings will stay unchanged for 2013 and drop further to 119Bn won when low-priced ships are delivered in 2014.

Although HMD benefited from the surge in products tanker orders last year, prices face downward pressure. In 2012 HMD accepted an order for 20 MR tankers from Sinokor Merchant Marine for just $30.9M each ?the lowest price for MR newbuildings in 2012. The tankers are being built for a charter-in deal with Shell.

Still, Jeon believes strong demand for fuel-efficient MR products tankers should lift HMD's 2013 order intake to $3.6Bn from $2.96Bn in 2012.

Greek broker Intermodal estimates MR newbuilding prices have dropped from $36M in 2010 to $33M in 2012.