Petroleum chemical product carriers drive order performance of Korea shipbuilding industry
The total order amount for PC vessels this time has set a record for the “highest-ever price.”
The new shipbuilding price of petroleum chemical product (PC) carriers has reached an all-time high, propelling them to become a major revenue driver. Particularly, PC vessels account for 43 percent of the total order backlog secured by HD Korea Shipbuilding & Offshore Engineering this year, playing a pivotal role in driving overall order performance, BusinessKorea reports.
According to HD Korea Shipbuilding & Offshore Engineering on June 16, Hyundai Mipo Dockyard has consecutively secured orders for four PC vessels, two each from European and Middle Eastern shipping companies on June 5 and June 7, totaling 285.6 billion won (approximately $256.2 million). The ordering companies are reportedly Greece-based Chios Navigation and Dubai-based Onex DMCC, and all vessels are expected to be medium-range (MR) tankers with a capacity of 50,000 deadweight tons (DWT).
The highlight is that the total order amount for PC vessels this time has set a record for the “highest-ever price.” Onex's unit price for the MR tanker ordered is approximately $54 million (75 billion won), marking a record high. HD Hyundai Mipo previously set a record in March by securing two MR tankers from Pan Ocean at $51.75 million (71.9 billion won) per vessel. This new achievement comes just three months after establishing the previous record.
The orders pouring in for PC vessels are also a positive development. As of today, HD Hyundai Mipo has secured a total of 48 PC vessels, surpassing last year's performance of 37 vessels even before the first half of this year has ended. This marks the largest scale since the peak year of 2017, when a record 51 vessels were ordered. Among the 112 vessels ordered by HD Hyundai-affiliated shipyards to date, PC vessels account for the largest share at 43 percent.
The strong market conditions for PC vessels are bolstered by geopolitical risks such as the Russia-Ukraine war and incidents in the Red Sea. The war has redirected the transportation of petroleum and chemical products from land pipelines to sea routes. Additionally, attacks by Yemen's Houthi rebels have compelled ships to reroute towards Africa and the Cape of Good Hope instead of transiting through the Suez Canal. These factors have resulted in a significant increase in demand for MR tankers.
In reality, PC vessel prices have surged due to increased demand. According to Clarkson Research, a U.K.-based maritime and shipping analysis and research service provider, the price of a 50,000 DWT MR tanker has risen by 18.4 percent from $43.5 million in 2022 to $51.5 million as of June 14. The Baltic and International Maritime Council (BIMCO) reported in a recent study on June 12 that the new shipbuilding price index has recently reached its highest level in 16 years since 2008, which was the most prosperous period for the shipbuilding industry.
