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world shipbuilding Hanjin Shipping’s demise. One of the local shipping companies that will revitalize and expand its fleet under the 5-year program is Hyundai Merchant Marine (HMM). It will triple its current capacity of 330,000 TEU under the program. Last month, HMM selected three South Korean shipbuilders who will build the 20 eco-friendly mega containerships it is to order under its “Capacity of 1 Million TEU Strategy.” Under the program, HMM intends to order a total of twelve 23,000 TEU and eight 14,000 TEU mega containerships. Since sending out a Request for Proposal (RFP) to shipbuilding companies on April 10, HMM has considered all the conditions for newbuilding including delivery date and price of new ships suggested by shipbuilders, and finally selected three shipbuilders to sign a Letter of Intent (LOI) for the 20 new vessels. The orders will go to South Korea’s three biggest shipyards, which have all had to undergo “self-rescue” efforts, which include disposal of non-core assets, employee layoffs, and optimization of production capacity. Seven of the 23,000 TEU ships will be built at Daewoo Shipbuilding and Marine Engineering (DSME) and five at Samsung Heavy Industries (SHI). All eight of the

14,000 TEU ships will be built at Hyundai Heavy Industries (HHI). The 23,000 TEU containerships are expected to deliver from the shipyards in the second quarter of 2020. The 14,000 TEU containerships will be delivered in the second quarter of 2021.

South Korea’s three biggest shipyards, DSME, SHI and HHI, have all had to undergo ‘self rescue’ efforts

In its most recent presentation to investors last month, DSME reported that its financial improvement program had resulted in an operating profit for 2017 of 733 billion won, up from a loss of 1.51 trillion won in 2016. The profit was despite lower sales of 11,102 billion won in 2017, versus 12,819 billion won in 2016.

As of the end of April, DSME had a total backlog of 96 ships, drill rigs, and production facilities on order valued at $22.7 billion. The backlog includes 74 commercial vessels valued at $12.61 billion, seven offshore vessels valued at $6.38 billion, and 15 naval ships and vessels valued at $3.76 billion. Distressed shipbuilder STX Offshore & Shipbuilding was able to secure an order for four MR2 product tankers with ClearOcean Tankers, a joint venture between Gunvor Group, Oceangold Tankers, and Maas Capital. ClearOcean also entered into a contract with China’s Daehan Shipbuilding for two LR2 product tankers. All six of the contracted vessels will be delivered during the first half of 2019, and will be eco-friendly and scrubber-ready. Clearlake Shipping, Gunvor’s whollyowned shipping division, has entered into long-term time charters for the vessels and Oceangold Tankers is also acting as construction supervision and technical manager of the vessels. Based on data from Clarksons, South Korean shipbuilding groups HHI, DSME, and SHI account for a 25.8% market share by deadweight tons of 99.14 million dwt of new ships delivered in 2017.

Table 1 - Worldwide New Ship Orders (GT in 1,000) Japan

S. Korea

China

Europe

Other

World Total

Year

#Ships GT

#Ships

GT

#Ships

GT

#Ships

GT

#Ships

GT

#Ships

GT

2013

571

13,804

551

35,452

1,417

43,925

157

1,422

836

8,597

3,532

103,200

2014

604

19,314

340

24,594

1,164

31,372

161

2,038

619

4,282

2,888

81,600

2015

599

22,218

273

23,321

740

24,932

148

2,328

580

4,401

2,340

77,200

2016

183

2,519

89

5,780

277

6,653

102

2,586

393

1,262

1,044

18,800

2017

192

2,293

170

18,594

408

15,090

166

3,316

352

3,367

1,288

42,659

Table 2 - Worldwide Ship Completions (GT in 1,000) Japan

S. Korea

China

Year

#Ships GT

#Ships

GT

#Ships

GT

#Ships

GT

#Ships

GT

#Ships

GT

2013

540

14,588

386

24,504

1,073

25,903

159

1,111

931

4,374

3,089

70,580

2014

522

13,421

343

22,595

914

22,707

166

1,320

1,018

4,575

2,963

64,618

2015

520

13,005

358

23,272

949

25,160

152

922

891

5,137

2,870

67,566

2016

514

13,309

359

25,035

824

22,355

165

1,537

681

4,187

2,543

66,422

2017

489

13,036

288

22,175

778

23,786

184

1,609

646

4,768

2,385

65,374

Source: Shipbuilders Association of Japan/HIS Markit World Shipbuilding Statistics

22 Marine Log // June 2018

Europe

Other

World Total

Marine Log June 2018  
Marine Log June 2018