601

Views

Polaris Orders Five More Giant Bulkers from HHI

HHI
File image

By MarEx 2017-10-23 21:21:06

Polaris Shipping has ordered five more very large ore carriers (VLOCs) from Hyundai Heavy Industries, bringing the total to $1.5 billion and eighteen ships. In preparation for future compliance requirements, the vessels will be built to an LNG ready design and will be fitted with scrubbers, according to HHI.

Polaris placed an order for three of the ships in June and signed for ten more last month – HHI's largest single contract in five years. The massive 18-ship order is a significant investment for Polaris, but it is also a significant win for Hyundai Heavy Industries, which is facing a declining orderbook and a dearth of new sales. Even when including the first 13 new orders from Polaris, HHI only took in one third of its projected sales volume for the year through September, and it is down to an order backlog of 75 vessels – enough for about eight months of work.

The long downturn in shipbuilding is taking its toll not just on HHI but on the entire Korean shipyard sector: according to the Korea Offshore and Shipbuilding Association, the nation's yards and suppliers eliminated 35,000 jobs in the first half of 2017, in addition to the 37,000 positions lost in 2016. HHI's three yards have asked employees to rotate out on leaves of absence in order to reduce payroll expenses. 

For Polaris, the new ships will help to fulfill a charter agreement with Brazilian mining giant Vale and to replace the firm's aging VLCC-to-VLOC conversions, which date to the early 1990s. Some vessels in this class have been found to have issues with hull cracking, like the Stellar Daisy, which broke up and sank in the Atlantic on March 31 with the loss of 22 crewmembers. Polaris Shipping has confirmed that two more vessels, the Stellar Queen and Stellar Unicorn, also had problems with cracking. AIS tracking and Equasis records show that the Unicorn has since been scrapped at the Gadani shipbreaking yard in Pakistan.