Hyundai Receives $2.7B Order for Containerships Linked to CMA CGM
South Korean shipbuilding group HD Korea Shipbuilding & Offshore Engineering received a large order for new containerships which the company is valuing at approximately $27 billion. IN announcement only identifies the customer as a European shipping company, but it is being widely reported that CMA CGM is behind the order.
The contract comes as the container shipping segment is already in the midst of record growth. The second half of 2024 and 2025 are scheduled to see the introduction of the vessels ordered during the pandemic including an expanded emphasis on the megamax class, ships above 18,000 TEU.
The order is for a total of 12 vessels with half to be built at the HD Hyundai Shipyard in Ulsan while the other six will be built at HD Hyundai Samho in Yeongam. Delivery of this new class of ships will be completed by June 2028.
Few details were released other than the ships will have a capacity of 15,500 TEU. Reports indicate that the vessels will be LNG-fueled and incorporate the latest technologies. This will include a heat recovery system using waste heart for energy.
CMA CGM did not officially confirm the order today but it has been reported that the carrier was among one of several leading carriers all negotiating with shipyards for additional vessels. With this order, the French carrier’s orderbook will surpass 1 million TEU. The company already has a total of 643 vessels in operation with a total capacity of 3.75 million TEU. Orders stood at 82 vessels with a total capacity of 990,000 TEU.
Reports have speculated that even with a level of older vessels being replaced or retired from the fleet that CMA CGM is poised to grow its market share. It currently has 12.5 percent according to data from Alphaliner. It has been highlighted that they are currently in a position to surpass Maersk to become the second-largest carrier in the segment. CMA CGM has previously reported that it will be investing more than $17 billion for the delivery of 120 LNG-fueled vessels due for delivery by 2027.
HD Hyundai emphasized the order is part of its strategy to focus on securing high-value-added ships, The shipbuilding group looks to enhance profitability by focusing on orders for high-cost vessels such as LNG-fueled containerships and LNG carriers. It has also been among the first to receive orders for the new class of very large ammonia gas carriers.
With these latest orders, HD Hyundai has achieved 120.5 percent of its 2024 order target for $13.5 billion in new contracts. In just over six months, the group has received orders for $16.27 billion in new ships with a total of 144 ships. The orders consist of chemical tankers (60), LPG/ammonia carriers (49), and eight LNG carriers. They add to the book the 12 containerships as well as having orders that include 13 crude oil tankers. Earlier forecasts for 2024 had expected a slower pace of orders.