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Hyundai Heavy Industries Win 900 Billion Won Order for Ore Carrier
Subduing Order Shortage Concerns
Hyundai Heavy Industries Win 900 Billion Won Order for Ore Carrier
  • By Jung Min-hee
  • September 26, 2017, 19:45
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Chung Ki-seon (left), managing director of Hyundai Heavy Industries, is shaking hands with chairman Kim Wan-jung of Polaris Shipping. (photo courtesy: HHI)
Chung Ki-seon (left), managing director of Hyundai Heavy Industries, is shaking hands with chairman Kim Wan-jung of Polaris Shipping. (photo courtesy: HHI)

 

Hyundai Heavy Industries announced on September 26 that the company signed a contract for ten 325,000-tons VLOC with shipping company Polaris Shipping. The total amount of the order contract is US$800 million, or about 908.6 billion won.

As the Hyundai Heavy Industries Group’s three shipbuilders (Hyundai Heavy Industries, Hyundai Samho Heavy Industries and Hyundai Mipo Dockyard) started cycled paid leave programs for employees, the other was good news to the group.

The signing ceremony was held at Gyeongdong Hyundai Building in Seoul in the afternoon of September 25 with the participation of Kim Wan-joong. chairman of Polaris Shipping, Ga Sam-hyun, president of vessel and marine sales at Hyundai Heavy Industries Group's marine business.

According to Hyundai Heavy Industries, this order is the largest in five years since winning an order for ten very large containerships from a Greek shipping company in 2012.  

In addition, the industry believes that Hyundai Heavy Industries may receive additional orders of about US$400 million in the future, depending on options (additional orders) of the contract.

The vessel to be constructed under the contract, is 340m in length, 62m in width and 29.8m in height, and will be sequentially delivered until 2021. The LNG-ready ship (ships that can use LNG as well as Bunker C oil as a fuel) is designed to meet environmental regulations and slash fuel consumption. Various eco-friendly technologies such as a ballast water treatment system and a scrubber were applied to the vessel.

The Hyundai Heavy Industries Group has built trust by winning orders for about 20 units in total including this order from Polaris Shipping with an order for four 250,000-ton VLOCs in 2013 as a beginning. Polaris Shipping is currently in the process of placing large-scale VLOC orders backed by a charter contract with Vale, the world's largest mining company.

On the other hand, it is highly likely that Korean shipbuilders other than Hyundai Heavy Industries will soon win VLOC orders as Vale is discussing long-term charter contracts for about 30 vessels with Korean and Chinese shipping companies for the purpose of restructuring fleets and expanding iron ore export.

According to Hyundai Heavy Industries, the three shipbuilders of the group have cut 99 deals worth US$5.8 billion this year this year. This figure is about five times the contract volume of the same period of last year (20 vessels and US$2 billion).

Meanwhile, on the previous day, Samsung Heavy Industries (SHI) announced that the company won a 1,118 trillion won (US$1.0 billion) order for six container ships from a European ship owner. The delivery date is December 31, 2019.

The contract was not disclosed at the behest of the shipowner but it is presumed that the shipbuilder received the work from the world's second-largest shipping company Swiss MSC. The size is 22,000 TEUs. Earlier MSC placed an order for five container ships with DSME.

According to the shipbuilding industry and foreign news services, MSC has been expected to order 5 vessels from DSME and 6 from Samsung Heavy Industries since last month.

SHI received the largest order since landing an order for ten 8,000 TEU-class container vessels worth one trillion won from Evergreen in Taiwan in 2010.

This order empowered SHI to reach its annual order target by signing order contracts worth about US$6.5 billion for a total of 24 vessels this year, excluding contracts that had already been confirmed. "Our order target for this year is US$6 billion, slightly higher than last year's US$5.3 billion," Park Dae-young, president of SHI, explained earlier this year.