Related news from disparate sources piqued my interest over the holidays.
The gist of the article is that the global downturn is now beginning to affect shipyards, and South Korea, home to 7 of the world’s 10 largest shipbuilders, experienced a plunge in orders in 2009.
According to Clarksons PLC, a London-based shipping brokerage and consulting firm, 2005-07 were the biggest years ever for shipbuilders, reaching a peak of 90 million compensated gross tons ordered worldwide in 2007. This plummeted to less than 10 million ordered in 2009, and China nearly tied South Korea in new orders.
South Korea previously garnered 10% of its GDP from shipyard exports, and Korean policy makers expect the loss of orders to lead to steep job losses and financial difficulties for shipyards. In December, they began to propose steps to cope with the changes in coming years. This may include restructuring troubled companies and providing subsidies to encourage shipyards to enter new businesses, primarily building platforms for oil and gas and wind turbines.
There are now 37 drillships under construction: 34 at shipyards in South Korea, and only 3 in Singapore. The most recent contract announced (Dec. 18) is the US $1.1 billion order with South Korea’s Daewoo Shipbuilding to build two new drillships for delivery in 2012.
Contracts for new semisubmersible drilling rigs are more widely distributed and there are 38 under construction worldwide: 17 in Singapore, 10 in China, 5 in South Korea, 3 in the UAE, 2 unspecified (potentially Brazil?), and 1 in Italy (according to RigZone).
Yards will stay busy for several years, working off this order backlog, but orders for new rigs have slowed. Which makes a January 4 report in the Moscow Times (provided by Marinelink.com) all the more curious.
Russian Prime Minister Vladimir Putin announced that the state-run United Shipbuilding Corp. would invest $7 million in two joint projects:
- Create a new yard on Chazhma Bay to build drilling platforms with Singapore’s Yantai Raffles.
- Add a new drydock to the Zvezda factory in Bolshoi Kamen to make tankers (LNG and other) with South Korea’s Daewoo.
Putin said the Russian government would spend $5 billion on new civilian ships and related technology in the Far East through 2020. It is a curious time to invest in infrastructure projects, one possibility being that Putin wants construction money spent on infrastructure improvements within Russia, rather than giving it to neighboring South Korea, China, or Singapore.
(And with a nod to the cold front about to pummel the Gulf coast tomorrow, a photo in the Houston Chronicle this week showed that über-athlete Putin prefers SCOTT ski goggles, while Russian President Dmitry Medvedev prefers Bogner. Last January, the Huffington Post showed Putin in a similar pair of old SCOTT goggles --and hat-- but he has wisely switched to wearing a svelte, safe ski helmet this season. Throwing caution to the wind, Medvedev is still in a hat.)
Follow-up, 12 Jan 2010, from marinelink.com:
"According to a Jan. 12 report from The Chosum Ilbo, Korean shipbuilders won new orders worth over $1 billion in the first 10 days of the new year, in a complete reversal of the situation last year. STX Offshore & Shipbuilding and Hanjin Heavy Industries delivered the good news on Jan. 11, and Daewoo Shipbuilding & Marine Engineering and Sungdong Shipbuilding & Marine Engineering won new orders earlier. Industry insiders said an overseas marketing drive in the second half of last year finally paid off. "
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