Korean Shipbuilding & Offshore Engineering (KSOE) expects to gain momentum in 2020, following the strengthened emission regulations which will force shippers to replace their old vessels, as Hyundai Heavy Industries’ Senior Vice President reported.
Specifically, the IMO’s 2020 sulphur cap regulation, which came into force in January 1st 2020, enforces the shipping industry to limit the sulphur in fuel oil used on board ships operating outside designated Emission Control Areas will be reduced to 0.50% m/m (mass by mass).
Korea Times reports that Hyundai Heavy Industries Senior Vice President Kang Jae-ho stated that the demand for replacing old vessels is increasing following IMO’s regulation. Therefore, they expect this to have a positive impact on the shipbuilding sector.
Moreover, Kang said that although the “building price remains at an unsatisfactory level, the increase in orders will push up the overall profitability.”
KSOE noted that a growing number in the shipping industry is ordering eco-friendly container and tanker vessels, while LPG carriers are presenting solid orders from India, China and the U.S.
Kang said the U.S., Russia, Australia and Middle East nations are showing sharp increases in their LNG output while demand from Asian countries is soaring. Along with ongoing key LNG projects in Qatar and Russia, such a momentum will continue to buoy KSOE units’ profitability.
Kang concluded that as environmental concerns grow, IMO will issue stronger emission regulations in 2030 and 2050.
