[Asia Economy Reporter Hwang Yoon-joo] Amid growing concerns of a near-term order cliff due to the spread of the novel coronavirus infection (COVID-19), the Korean shipbuilding industry is receiving a series of good news on new orders.
Hyundai Heavy Industries Group succeeded in securing orders for three medium-sized LPG carriers on the 28th. With this contract, Hyundai Heavy Industries Group has secured all 10 medium-sized LPG carriers ordered worldwide since 2019.
They signed a construction contract worth approximately 195 billion KRW for three 40,000 cubic meter (㎥) class medium-sized LPG carriers from EPS (Eastern Pacific Shipping), a Singapore-based shipping company.
The contract includes options for two additional vessels, raising expectations for further orders. The vessels ordered this time are 180 meters long, 28.7 meters wide, and 18.7 meters high, to be built at Hyundai Mipo Dockyard in Ulsan and delivered sequentially starting from April 2022.
Notably, these vessels are equipped with LPG dual-fuel propulsion engines, enabling compliance with the strengthened International Maritime Organization (IMO) sulfur oxide emission regulations without the need for scrubbers.
According to Clarksons, a shipbuilding and shipping analysis firm, global LPG maritime transport volume recorded 100.4 million tons in 2019 and is expected to increase by about 6% to 110 million tons in 2021.
Earlier, Hyundai Heavy Industries Group secured orders for two large crude oil carriers worth 150 billion KRW from a European shipowner. The ordered vessels are 274 meters long, 48 meters wide, and 23.2 meters high, with a capacity of 158,000 tons.
They will be built at Hyundai Heavy Industries in Ulsan and delivered sequentially to the shipowner starting January 2022. The contract includes options for two additional vessels, raising expectations for further orders.
Hyundai Heavy Industries Group began building ultra-large crude oil carriers domestically for the first time in 1974 and has built over 1,600 tankers (including crude oil carriers and petrochemical product carriers) to date. The group set its shipbuilding order target for this year at 15.7 billion USD, 21% higher than last year's order performance of 13 billion USD.
Despite the COVID-19 impact and consecutive LNG carrier orders from China, which had cast a gloomy atmosphere over the domestic shipbuilding industry, the mood is changing as good news on orders continues to come in recently.
In particular, the Korea Eximbank's promise of large-scale support worth 5.2 trillion KRW to the shipbuilding industry has eased concerns. On the 27th, Visit Kyoo, President of the Korea Eximbank, visited Ulsan and announced plans to increase funding for shipbuilders from the initial 3.8 trillion KRW to 5.2 trillion KRW. The shipbuilding industry expects this support to help overcome the order cliff crisis.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
