HMM's acquisition of SK Shipping has fallen through, leading the shipbuilding industry to anticipate ship orders. HMM is continuing to expand its fleet through a 23.5 trillion won '2030 mid- to long-term investment strategy.'

According to industry sources on the 17th, HMM plans to acquire an additional 66 bulk carriers, including dry bulk carriers and tankers (Tanker·oil carriers), by 2030. Based on deadweight tonnage (DWT), this amounts to 6.22 million DWT, valued at approximately $3.3 billion (about 4.5764 trillion won).

The Algeciras is docked at the Busan Gangseo District Hyundai Busan New Port (HPNT). /Courtesy of News1

To ensure the seamless achievement of the 2030 mid- to long-term strategy, HMM attempted to acquire everything except the liquefied natural gas (LNG·Liquefied Natural Gas) institutional sector of SK Shipping. HMM is prohibited from conducting LNG operations until 2029 under a non-compete agreement made when it sold its LNG division.

As of the end of last year, SK Shipping owns 23 oil chemical product carriers, 14 liquefied petroleum gas (LPG·Liquefied Petroleum Gas) carriers, 10 bulk carriers, and 7 bunkering vessels. If the acquisition had been completed, HMM could have achieved 82% of its target in terms of fleet size.

However, with both sides unable to bridge the price gap, the acquisition of SK Shipping fell through, and HMM had no choice but to achieve its goals through the acquisition of second-hand vessels, chartering, and new builds.

This year, orders for tankers, bulk carriers, and LPG carriers have sharply decreased, leading domestic shipbuilders to expect new orders. According to British shipbuilding and shipping analysis firm Clarkson Research, the total orders for tankers, bulk carriers, and LPG carriers worldwide until July this year amounted to 630,000 compensated gross tonnage (CGT), a 74% decrease compared to the same period last year. This decline is larger than the 50% decrease in total worldwide ship orders, which stood at 2.33 million CGT during the same period.

The local shipping company HMM maintains a low ratio of Chinese vessels, making it likely to choose domestic shipbuilders for new orders. The proportion of Chinese vessels held by global shipping companies is over 25%, while HMM's proportion is 1.1%.

An industry insider noted, "While the second-hand bulk carrier market is active, HMM will have no choice but to increase new builds."

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