Friday, December 30, 2011

■ Big 3 inked $50bn, “Order Boom Alone"

South Korea's Big three, Hyundai Heavy Industries, Samsung HI and Daewoo Shipbuilding & Marine Engineering, recorded outstanding new order results totalling about overall $50bn in 2011.

However, gap between small-and-medium builders and major yards is getting bigger, as S&M yards being suffered from new order shortage.

■ S. Korea wins back world No.1

South Korea wins back the world first place in new order (in terms of Value/CGT/GT) from China, by concentrating on winning newbuilding high-value ships, such as LNG carrier, very-large containership, offshore plant (drillship, rig, FPSO).

■ World newbuilding delivery biggest ever

World newbuilding delivery recorded the biggest ever, close to 100m gt. Unfortunately(?), however, from next year, delivery is expected to be on a downhill road.

■ Newbuilding price failed to recover

Unlike projected newbuilding price recovery early this year, the price decreased to the level from right after the financial crisis in 2008 and shipbuilders would have lowered profits by low-margin newbuildings.

■ Yards massive restructuring

Many shipbuilders in South Korea seem to undergo the second round restructuring and those from China are to go through massive restructuring/M&A, as well.

■ Ship financing shrinkage

Amid strained ship financing due to Eurozone fiscal crisis, following global financial crisis, many shipbuilders/shipping companies have suffered from financial difficulties.

■ Fuel-efficient ship boom

On the base of tightened-up international environmental regulation, rise in fuel oil price, etc., yards push for development of eco-friendly fuel-efficient vessel.

■ LNG-carrier demand surges

Demand for newbuild LNG-carrier surged by damage on Japanese nuclear power plant, aftermath of the devastating Earthquake, and the US' permits on LNG export.

■ New concept offshore plant 1st ordered as newbuild

Samsung Heavy Industries of South Korea booked LNG-FPSO and Hyundai HI won LNG-FSRU, for the first time as newbuilding in the world.

■ World-first 18,000-teu boxship

Daewoo Shipbuilding & Marine Engineering of South Korea inked 20 18,000-teu ultra-large boxships.

Published : December 30, 2011


Doosan Engine product diversified

South Korea's leading engine-maker Doosan Engine is expected to push for offshore-plant and LNG carrier sectors.

Analyst Sung Gi-Jong from Daewoo Securities said on 29 December, "World new order for LNG carrier in 2012 is to be placed around 50 vessels, among which South Korea would win about 40-some vessels. As demand for natural gas would be more than 646m cbm for the next two years, at least 85 LNG carriers would be needed to transport gas around the world."

Daewoo's Sung said that owners would make additional placements for newbuild LNG carriers due to slow growth in LNG-carrier tonnage and South Korean builders' optional contracts for LNG carrier in 2011 reach about 22 vessels.

The South Korean engine manufacturer has entered a new market, by securing KRW 40bn ($34.4m) of supply contracts for offshore-plant engines, 24 units for Samsung Heavy Industries' drillship, etc.

Also, Doosan is forecast that its next-generation engine for LNG carrier and offshore plant would surge its profit.

He said, "Doosan Engine with Hyundai Heavy Industries places in unparallel position in marine large main engine market. As domestic yards increase new order for large boxship and LNG carrier, Doosan has secured safety net for additional supply."

Besides, Doosan is predicted that it would diversify its product portfolio, by entering auxiliary engine for offshore plant, on-shore power generator, etc.

Sung forecast that new order for commercial-ship engine would decrease, while offshore-plant and onshore-plant would grow in 2012. Also, Doosan would be able to off-set shortage in domestic demand by attracting overseas market, for instance, China, etc.

Meanwhile, Doosan Engine's new order for 2011 totals about KRW 1.2trn and over KRW 1.2trn of new order is expected for next year.

Published : December 29, 2011


Hyundai Samho revenue "Largest"

Hyundai Samho Heavy Industries announced Wednesday that it has achieved the all-time high revenue of KRW 4.8trn ($4.15bn) for 2011.

The South Korean shipbuilder delivered 49 vessels.

Also the Hyundai Heavy Industries-affiliated yard won new orders worth about $3.9bn this year including orders for very large containerships, LNG carriers, offshore oil rig module, etc.

But a yard official said, "Next year management environment is expected to get worse as new ship orders would decrease 30% and ship price would decline 30%."

Published : December 29, 2011


Thursday, December 29, 2011

Hyundai awarded Chevron platforms

Chevron has awarded a key contract for the Escravo Phase 3B gas development off Nigeria.

The gas project will see the addition of two platforms to bump up the output by another 420 million cubic feet per day from the end of 2014.

Industry sources said the supermajor is behind the $900 million deal recently awarded to Ulsan-based Hyundai Heavy Industries.

The South Korean major shipbuilder unveiled on Dec 18th a contract from an undisclosed client for two offshore gas platforms – the first weighing 11,000 tonnes and a second 5000-tonne structure with combined output of 420 million cubic feet per day.

Published : December 28, 2011


Russia boosts shipbuilding

Modernization of Russian shipbuilding industry will be realized in partnership with Korean and Singaporean companies.

The leader of Russian shipbuilding industry – United Shipbuilding Corporation (USC) launches its ambitious program that might return competitiveness to this sector of Russian economy. This sector today includes over 1 thousand of companies and employs more than 450 thousand of specialists.

In the nearest few years Russia should build two new modern shipyards on the Far East and to modernize the shipyards on the Baltic Sea - in St. Petersburg (“Admiralteiskie Verfi”) and in Kaliningrad (“Yantar’”).

By the look of things the main partner in modernization of Russian shipbuilding will be the companies from South Korea. In December the USC established the joint venture with Korean shipbuilding holding STX Finland. The company named Arctech Helsinki Shipyard Oy will be specialized on the shipbuilding for the Arctic. The new joint venture will buy the Helsinki Shipyard from STX Finland. Also it has an option to buy over 20 percent of shares of Aker Arctic Technology Inc. (AARC), the world leader in development of arctic sea shipbuilding technologies.

Arctech Helsinki Shipyard Oy signed contract with the Russian leading ship owner Sovkomflot on construction of two multifunctional ice class service vessels which will be used on the Sakhalin gas fields.

The new shipyards will be constructed on the Far East. Vladimir Putin during his visit to Severodvinsk in November mentioned that the works on one of them are already on the way. This will be the shipyard “Zvezda DSME” in the town Bolshoy Kamen near Vladivostok. The new shipyard which is the joint venture of USC and Daewoo Shipbuilding & Marine Technologies will be specialized on construction of big tonnage tankers for shipping of oil, gas and chemical products.

The share of the Korean company in this project is 20%. In 2011 both partners plan to invest 2,5 billion rubles so the new shipyard will be finished before the end of 2013. The joint venture already has orders from Sovkomflot that wants to build here 6 tankers of ice class Aframax. The first four of them will be constructed in Korea and the rest in Russia when the shipyard will be opened. Sergey Frank, the General Director of Sovkomflot, reported that the company is going to order 10-12 tankers of this class and most likely all of them will be built on “Zvezda DSME”.

Another modern shipyard will be built on the Far East together by USC and Yantai Raffles Shipyard Ltd., Singapore. It got the name Vostok Raffles Shipyard and will be specialized on construction of sea drilling units, floating oil and gas platforms, service vessels and other equipment for the sea shelf. The necessary investments in this project are estimated in 15 billion rubles before 2015. The Singapore company owns 25% of the joint venture shares.

Published : December 29, 2011


Korea increase steel output

South Korea increased steel output with November’s output up 12.4% year-on-year to 5.8mt, according to the World Steel Association (WSA).

China, the world’s largest steel producer, saw volumes largely unchanged from a year ago at 49.9mt.

Japan, however, saw volumes decline by 3.2% year-on-year to 8.7mt, which was also an 8.3% decline from October’s output.

Last month’s world crude steel capacity utilisation ratio of the WSA’s 64 member countries fell to 73.4% to its lowest point in two years.

Some 116mt of crude steel was produced in November 2011, up only 1.1% on twelve months ago as short-term prospects for demand continue to weaken.

Published : December 29, 2011


Wednesday, December 28, 2011

Daewoo awarded '2011 Best Ships'

'Vale Brasil,' 400,000-dwt VLOC, in a trial run. Nominated from Naval Architect and Marine Log for the significant ships of 2011.

Daewoo Shipbuilding & Marine Engineering-built ten vessels were awarded for Significant Ships of 2011.

The South Korean yard announced that a total of ten vessels were selected as the significant ships of the year, including four vessels from UK's Naval Architect, one from Fairplay Solution, each four from the US' Marine Log and Maritime Reporter.

Three among ten vessels were honorably listed on two magazines at the same time.

In terms of ship type, one drillship, one semi-submersible drilling rig, two LNG carriers, one VLOC, VLCC, boxship and heavy transport vessel each were nominated. Also, selection of one wind-turbine installation vessel and one container-RoRo well show Daewoo's contribution to development of new vessels.

Published : December 27, 2011


SPP reaches $1.4bn target

SPP Shipbuilding of South Korea has nearly reached its new order target for this year, by winning a total of 40 vessels of $1.4bn, despite recently clouded shipbuilding and shipping market and European financial crisis.

Facing with decrease in new order for commercial ship, SPP's 2011 new-order record seems to be a successful outcome.

SPP said, "Developing fuel-efficient eco-friendly vessels and gaining an early edge in the market contributed the outcome."

SPP's overall new order this year is mostly made up of MR product carriers, about 70%, which recorded taking over 50% of world new order in MR PC sector.

It has so far successfully delivered 80 PCs and its high-quality was acknowledged by owners.

Also, one of MR PCs delivered this year and one kamsarmax bulker were awarded 'Significant Ships of the Year' by Naval Architect in 2011, which is four-year consecutive selection since its first delivery. Now every type of SPP-delivered vessel was honorably awarded as the significant ship.

Meanwhile, according to Clarksons, SPP ranks the sixth place in South Korean yards and 12th in world shipbuilders with orderbook of 119 vessels or 2.107m cgt (worth about $4.5bn), as of December 1st.

Published : December 28, 2011


Hyundai Samho record-high delivery

South Korea's Hyundai Samho Heavy Industries made a record in delivering a total of 48 vessels of 5.74m dwt so far this year.

Starting with a delivery of S385, 317,000-dwt VLCC to Today Makes Tomorrow (TMT) of Taiwan on 6 January, Hyundai Samho successfully delivered the 48th newbuild kamsarmax bulker on 6 December.

For the newbuilding delivery by ship type, 20 containerships, including six 13,100-teu, 15 bulkers, eight crude oil carriers, including four VLCCs, three car carriers and two product carriers were delivered in 2011.

Hyundai Samho said, "Outstanding delivery this year is about average delivery of one vessel per week. We would be able to make a successful result in difficult circumstances, by shaving off building period owing to efforts from every staff, increasing dock turnover ratio, etc."

Meanwhile, Hyundai Samho's overall delivery since 2000 stands at cumulative 329 vessels.

Published : December 27, 2011


Korea vs. China: Neck to Neck

Cutthroat new order award competition between South Korea and China is expected to continue.

In 2011, demand for high-value vessel increased, while that for commercial ship was in decrease. Facing with a change in ship demand structure, Korean shipbuilders have regained the first place in new order by winning ultra-large containership, LNG carrier, etc., while Chinese kept focusing on newbuild merchant ship.

According to statistics from China Ship Marketing Research Center, world newbuilding delivery and new order in the first 11 months stand at 147m dwt and 75m dwt each and orderbook as of the end of November turns out to be 373.82m dwt.

China maintained the first place in delivery, new order and backlog.

During January-November period, China took 42% of overall delivery with 61.77m dwt and 44.9% of world new order with 33.69m dwt, while Korea delivered 51.21m dwt (34.8%) and won 27.48m dwt of new order (36.6%). As of the end of November, China accounts for 43.5% of overall orderbook with 162.7m dwt and Korea 32.1% with 119.96m dwt.

However, South Korean yards would take back the top from China in new order in cgt terms.

The two countries' scramble for the world top seems to continue for a while.

Chinese experts forecast that it would not be that difficult for China to keep its place, however, high-value technology should be prepared.

China Ship Marketing Research Center (Chshmar Center), jointly set up by China State Shipbuilding Corporation (CSSC), China Shipbuilding Trading Co. Ltd. (CSTC) and CSSC Technology Research & Economy Development Institute (TREDI), is the first research institution specialized in ship market and shipbuilding industry in China. It is keeping in touch with the most of domestic shipyards and shipbuilding research organizations.

Published : December 27, 2011


Big3 target $40bn: 2012

Shipbuilders tend to operate the yard rather conservatively, by setting 2012 target similar to or lower than that from 2011, as newbuilding price being in decrease and new order for commercial ship expected to be in depression next year.

Therefore, South Korea's Big three made new order targets totalling about $40bn for 2012.

Big three, which made record-high new order of overall $50bn this year since financial crisis in 2008, plan to achieve the target by focusing on offshore plant market next year, just as in 2011.

According to market resources on 26 December, Hyundai Heavy Industries is known to set a target around $14bn-16bn for next year. It already reached 2011 target of $19.8bn in Shipbuilding and Offshore & Engineering divisions with Hyundai Samho Heavy Industries and secured the largest number of 11 newbuild drillships this year among Big three.

Daewoo Shipbuilding &Marine Engineering's 2012 target is same as this year of $11bn, which is about 74% of $14.8bn of new order in 2011. Daewoo seems to make a conservative goal in consideration of uncertain economic market, such as Eurozone financial crisis, volatile exchange rate, etc.

The Geojae-based yard, in particular, is known that it is to carry out a reorganization this week to enhance offshore plant division and meet the target next year.

President Nam Sang-Tae, Daewoo said, "The proportion of shipbuilding to offshore in 2011 new order would be about two to eight or three to seven."

In case of Samsung Heavy Industries, which won $15bn year-to-date, its 2012 target is assumed to be around $11bn-12bn and it would also concentrate on winning newbuild offshore plant next year.

Published : December 26, 2011


Daewoo focus on offshore

Daewoo Shipbuilding & Marine Engineering, the world’s second-largest shipbuilder, expects new orders to drop 23 percent next year as shipping lines struggle with an oversupply of vessels and falling rates.

New contracts worth $11 billion may be signed in 2012, a decline from $14.8 billion of orders received this year, Seoul-based Daewoo said.

Demand for offshore products, such as drillships, may make up about 70-80 percent of the orders next year, it said.

Orders for new ordinary merchant vessels may slow amid falling rates from excessive capacity. To offset that, South Korean shipbuilders are focusing more on offshore units, whose demand may rise next year as oil reserves at existing fields run out.

“We expect demand to focus more on offshore units while the commercial vessel market will be very difficult next year,” Daewoo Chief Executive Nam Sang-Tae said. “We are hoping things will look better in 2013.”

The shipbuilder plans to invest 500 billion won ($435 million) in 2012 to meet growing demand for offshore products, which will include replacing a smaller floating dock to a bigger one, the company said. The company also plans to focus on getting more defense orders after Daewoo won South Korea’s biggest overseas contract for submarines from Indonesia.

Published : December 27, 2011


Monday, December 26, 2011

Flex extends Samsung FLNG

Flex LNG gets a temporary extension into early January of its preliminary agreement with Samsung Heavy Industries on its first floating LNG Producer (LNG/P) unit.

The LNG-FPSO is targeted at InterOil Corp and Pacific LNG Operations’s Gulf LNG project in Papua New Guinea.

The original deal, agreed with the yard on 11 April, was dependent on a 15 December sanction date being achieved on the project.

Published : December 26, 2011