Financial strife will cut orders for new ships by a quarter over the next year, a leading bank says.

The warning from BNP Paribas comes as newbuilding contracts sank by over 60% in September.

James Yoon of BNP wrote in a new report: “In the face of tighter market liquidity, increased trepidation toward further global economic slowdown and orders books of longer than three years, we forecast Korean orders will shrink by 19% next year amid another 25% drop in global orders.”

Following the warning, the French investment bank has downgraded the shipbuilding industry from “neutral” to “overweight”.

In September orders for new vessels reached seven million deadweight tons, Morgan Stanley says.

Analysts Park Sang Kyoo and Lee Hyun Jae say the figure represents a 66% fall from a year earlier despite the fact ship prices are starting to soften.

The twin reports led to further pain for South Korean shipyard stocks Monday.

STX Shipbuilding was hit hardest, dropping 9.3% to KRW 19,000 ($14.97) per share at one point.

Hyundai Heavy Industries lost 8.5% to trade at KRW 231,500 per share at midday, while Hyundai Mipo shares sank 9.1% to KRW 145,000.

Daewoo Shipbuilding & Marine Engineering saw up to 12% slashed from its market value amid renewed speculation its sale may fall through.