South Korean mid-tier shipbuilder Hyundai Mipo Dockyard (HMD) has won two LR1 tankers from Italian product tanker specialist D’Amico International Shipping (DIS).
Through a research note, Hana Daetoo Securities analyst Park Moohyun said, “The total contract value is USD44 million for each ship and this is an option for the deal related to two LR1 tankers which were ordered in April 2015. The two additional tankers will be built at the Hyundai Vinashin Shipyard in Vietnam.”
Park said, “HMD enters the LR tanker market using Hyundai Vinashin Shipyard. Entering a larger vessel market will enable the shipbuilder to diversify the ship type and to increase scale of sales.”
The analyst continued, “They are 75,000 dwt vessels that will have approximately 12 cargo tanks respectively. They can load about 520,000 barrels of clean oil.”
He said, “Half of commercial vessels that were newly ordered in 2015 are tankers. The noticeable fact is that the order volume of crude oil tankers and product/chemical tankers are increasing simultaneously. The current oil market has strengthened product/chemical tanker market. Given this, HMD will benefit from the strong tanker market.”
Park concluded, “Thanks to advanced eco-design of HMD and improved productivity at Hyundai Vinashin Shipyard, the price of the LR1 tanker built by HMD does not show a big difference compared with STX Offshore and Shipbuilding’s LR1 tankers which is the biggest LR1 tanker manufacturer. Considering the low fixed costs at Hyundai Vinashin Shipyard, HMD’s profitability when it comes to building LR1 tankers is considered as positive.”