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HMM becomes savior of struggling shipbuilders

Seoul - Hyundai Merchant Marine’s (HMM)plan to order 20 container carriers is expected to breathe fresh air into the county’s ailing shipbuilding industry. According to sources in the shipbuilding industry, the country’s top three shipbuilders

Seoul - Hyundai Merchant Marine’s (HMM) plan to order 20 container carriers is expected to breathe fresh air into the county’s ailing shipbuilding industry. According to sources in the shipbuilding industry, the country’s top three shipbuilders, Daewoo Shipbuilding and Marine Engineering (DSME), Samsung Heavy Industries (SHI) and Hyundai Heavy Industries (HHI) are preparing to win orders from Hyundai Merchant Marine.

The country’s leading sea carrier said recently it sent local shipbuilders a request for proposal (RFP), to order 12 20,000 twenty-foot equivalent unit (TEU) container vessels as well as eight 14,000 TEU carriers. If the shipbuilders participate in the bidding, suggesting a price and deadline, the shipper will select a shipbuilder and sign a letter of intent. As the deadline will be tight, it is expected the shipping company will distribute the orders for the 20 ships among the top shipbuilders. Analysts say the massive HMM order, the first in seven years, will help local shipbuilders that have been going through restructuring. The shipping company needs new ships as it has to prepare for stricter environmental regulations of the International Maritime Organization that will take effect in 2020.

As it is scheduled to lower down the maximum sulfur content of bunker fuel oil to 0.5% from the current 3.5%, shipping companies will have to either get new ships using liquefied natural gas (LNG) or install equipment called “scrubbers” that reduce sulfur.

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