This report by the Commission on the situation in the world shipbuilding market is the third in a series, being a follow-up and extension of the first and the second reports presented to the Council of Ministers on 9 November 1999 as COM(1999) 474 final and on 18 May 2000 as COM(2000) 263 final, respectively. Shipbuilding, in the terms of this report, covers the production of merchant vessels only; naval vessels, offshore installations or small crafts are not considered here.

The third report is in continuity with the approach and the findings of the first two reports. Therefore certain elements of the earlier reports are not repeated. Such elements refer to the longer term supply and demand analysis, general remarks on the nature of shipbuilding contracts and on the underlying study works, the analysis of the financial sector in South Korea, details of certain investigated shipyards and the description of the applied methodology. However, the information contained in the first two reports is updated where appropriate and essential elements are repeated where necessary. This concerns in particular the detailed cost investigations for shipbuilding orders awarded to Asian yards as the underlying cost model is re-run each time new or better information is obtained.

This third report from the Commission updates information on market shares and price developments. Moreover, new cost investigations for orders placed in South Korean yards were undertaken since the last report and the results are presented here. The report also gives an assessment of the outcome of the various actions requested by the Council.