122 ships recycled, as firms scramble to achieve targets

About 122 ships were recycled in the third quarter (Q3) of 2019, even as major shipbuilders are scrambling to secure more deals to achieve their yearly outlook.

According to a report by No Shipbreaking Platform, about 73 ships were sold to the beaches of South Asia for dirty and dangerous breaking, amid several fatalities.

However, the three big shipbuilders are scrambling to secure more deals to overcome a series of sceptical outlooks on their 2019 earnings, as the end of the year nears.

The three shipbuilders are Daewoo Shipbuilding & Marine Engineering (DSME), Hyundai Heavy Industries (HHI), and Samsung Heavy Industries (SHI).

According to industry sources, the three shipbuilders are receiving a growing number of orders since the third quarter of the year. Among them, SHI is drawing attention to clinching a series of big deals.

SHI said Thursday, it inked a deal worth 485.3 billion won ($405 million) to build two 174,000-cubic meter liquefied natural gas (LNG) carriers for Malaysia International Shipping Corporation.

The latest order came after its Tuesday announcement that the shipyard also signed a 1.1 trillion won worth of order to build six 23,000- twenty-foot equivalent unit (TEU) container ships from Taiwan’s shipping company Evergreen Line. The 23,000-TEU container ship will be the world’s largest container ship when it is built.

With these two orders, SHI has clinched deals for 37 vessels valued at a combined $5.4 billion so far this year, achieving 69 per cent of its annual order target of $7.8 billion. The figure is higher than the remaining two Korean shipyards.

HHI also said it has achieved 48 per cent of the shipyard’s yearly order target, with its latest deal worth 676.6 billion won with the Defence Acquisition Programme Administration (DAPA), to build a next-generation Aegis destroyer of the Korean Navy.

DSME also announced a series of its recent deals with the DAPA to design and build a 3,000-ton submarine. The order is worth 1.11 trillion won.

DSME has achieved 51 per cent of its annual sales target.

Despite a series of deals they inked at home and abroad, experts said it will be difficult for them to reach 100 per cent of their annual sales target.

“Ship companies are discouraged by a series of global regulations on emission,” an official said.