South Korea’s Ministry of Oceans and Fisheries today unveiled its mid-term restructuring plan for the nation’s shipbuilding and shipping sector, suggesting a whopping 200 ships will be ordered by local companies at Korean yards in the next three years.
“Following the bankruptcy of Hanjin Shipping, sales of South Korea’s shipping industry were cut by over KRW10trn, and the tonnage of deepsea container lines has been cut in half,” oceans minister Kim Young-choon said today. “We have prepared a set of comprehensive measures to support the shipping and shipbuilding industries grappling with a protracted slump, intense competition and environmental regulations.”
The plan is to build 140 bulk carriers and 60 container ships, including a raft of 20,000 teu ships.
The ministry said it will establish a new agency in July to support placing orders for new ships in the form of investment or providing ship guarantees.
The ministry stated today that Hyundai Merchant Marine (HMM), the nation’s top shipping line, could have a box fleet of 1m teu by as early as 2020 – close to tripling in size. HMM has been widely reported as readying a big boxship order in the next few weeks, comprised of twelve 22,000 teu ships and eight 13,000 teu ships.
The news of such mammoth new orders coming out of South Korea will likely send shockwaves around the liner community in particular where the supply/demand equilibrium remains very tight.
The shipping downturn has been especially harsh to South Korea where many lines and yards have folded in recent years, while most of those that have survived have had to endure very tough restructuring.