Hyundai Heavy Industries (HHI) on Monday announced that Polaris Shipping has exercised options for five more 325,000 dwt very large ore carriers (VLOCs).
The additional orders come after an initial order for 10 vessels was confirmed in September this year. The contract price for the additional ships is KRW 450 billion (USD 400 million) or USD 80 million per ship.
While the initial order was to cater to a long-term contract of affreightment (COA) with Brazilian mining giant Vale, Polaris is also renewing its fleet, as many of its existing VLOCs are converted from single-hull oil tankers that were originally constructed in the early 1990s.
Polaris was one of seven shipping companies that were awarded COAs lasting 20 to 25 years by Vale, involving the construction of 30 new VLOCs. Vale is reportedly requesting newly built ships in the wake of the Stellar Daisy sinking on March 31.
Pan Ocean was awarded orders for four VLOCs, while H-Line Shipping, SK Shipping, and Korea Line Corporation were each awarded two VLOCs.
COSCO unit China Ore Shipping and ICBC Financial Leasing were awarded four and six VLOCs respectively.
Daewoo Shipbuilding and Marine Engineering (DSME) is said to be considered by the other South Korean ship operators to build the VLOCs awarded to them.
The Chinese ship operators are in talks with compatriot shipbuilders Yangzijiang Shipbuilding, Bohai Shipbuilding Heavy Industry, Qingdao Beihai Shipbuilding Heavy Industry, Dalian Shipbuilding Industry, and Shanghai Waigaoqiao Shipbuilding.
Prior to being awarded the Vale contracts, Polaris had also ordered three similar vessels at HHI in June.
“We have recently delivered seven ore carriers to Polaris Shipping and they have built up trust in us,” said HHI.
With Polaris exercising options for five more vessels, the entire HHI group, including Hyundai Samho Heavy Industries and Hyundai Mipo Dockyard, have won orders for 110 ships with total contract value of USD 6.7 billion year-to-date, achieving 90 per cent of its 2017 order target of USD 7.5 billion.
Sea News, October 23