Korean Media: Ultra-Large Oil Tanker Orders Surge 21-Fold, China Emerges as Biggest Winner!
On May 20, South Korean media outlet *Chosun Ilbo* published an article stating that new orders for ultra-large oil tankers globally in the first quarter of this year increased by more than 21 times compared to the same period last year. The biggest beneficiary has been Chinese shipyards, leveraging their pricing advantages. However, with rising vessel prices, orders are now shifting toward South Korean shipyards. Hanwha Ocean has seized the opportunity, securing 10 new ultra-large oil tanker orders this year. Although South Korea's shipbuilding industry is currently capitalizing on the oil tanker boom to ensure profitability, its long-term strategy remains centered on constructing high-value-added, environmentally friendly vessels such as LNG carriers.
Data released by Greek shipping brokerage Xclusiv shows that the total number of new ultra-large oil tanker orders worldwide reached 64 in the first quarter of this year—up dramatically from just 3 during the same period last year. An ultra-large oil tanker can transport up to 2 million barrels of crude oil at once, equivalent to a country’s daily crude oil consumption.
Due to navigation restrictions in the Strait of Hormuz, some oil tankers have become stranded, reducing the available fleet. Increasing uncertainty in shipping routes has triggered a sharp rise in short-term charter rates for oil tankers. As vessel operating profitability improves, shipowners are rushing to purchase new ships, leading to a rapid surge in newbuilding orders. Coupled with the need to replace aging oil tankers, oil tanker orders accounted for approximately 45% of all newbuilding orders in the first quarter of this year.
Initially, orders were concentrated at Chinese shipyards due to their relatively lower construction costs. Compared to LNG carriers, the technical barriers to building ultra-large oil tankers are lower. However, because these vessels offer lower profit margins than high-value ships, South Korean shipyards had previously not actively pursued such orders. According to reports, in just the first quarter of this year, Hengli Heavy Industry—a Chinese shipbuilder—secured over 38 new ultra-large oil tanker orders. In total, Chinese shipyards received 399 vessel orders in the first quarter, amounting to 12.39 million tons of gross tonnage, representing 70% of the global order share.
However, both freight rates for ultra-large oil tankers and newbuild prices have risen simultaneously. By March this year, the price for new large oil tankers reached $129.5 million—up 3.6% compared to the same period last year. As prices increase, South Korean shipyards have greater incentive to win orders. With major Chinese shipyards’ construction schedules already fully booked through delivery in 2029, shipowners have no choice but to turn to South Korean yards to meet their delivery timelines.
Hanwha Ocean has secured 10 new ultra-large oil tanker orders so far this year—2.5 times more than the 4 orders it received during the same period last year. Contract prices have also risen, increasing from between $129 million and $129.7 million per vessel last year to between $130 million and $130.5 million this year. Meanwhile, Hanwha Shipbuilding & Marine and Samsung Heavy Industries each secured 7 and 4 crude oil tanker orders respectively this year.
Domestic South Korean shipbuilders, including Hanwha Ocean, plan to continue advancing their order strategy centered on high-value large vessels, while selectively acquiring oil tanker orders that offer improved short-term profitability—such as ultra-large oil tankers. A Hanwha Ocean executive stated: “We plan to continue executing our selective order strategy focused on high-value large vessels, while remaining flexible in responding to market fluctuations.” As of March this year, Hanwha Ocean’s order backlog included 63 LNG carriers and 37 ultra-large oil tankers—nearly double the number of LNG carriers compared to ultra-large oil tankers.
Original Article: toutiao.com/article/1866578754243852/
Disclaimer: This article represents the personal views of the author.