en.Wedoany.com Reported - On May 4, HD Korea Shipbuilding & Offshore Engineering, the shipbuilding holding company of South Korea's HD Hyundai Group, announced it had signed a construction contract with domestic shipowner KSS Line for three VLGCs. The total contract value amounts to 504.8 billion won (approximately US$343 million, RMB 2.325 billion), equivalent to a unit price of US$114.3 million per vessel.

According to data from Clarksons, the current newbuilding price for an 88,000-91,000 cubic meter VLGC is approximately US$114 million, a 6% decrease compared to US$121.5 million in the same period last year.

These three VLGCs will be built by HD Hyundai Heavy Industries in Ulsan and are scheduled for sequential delivery by the end of December 2029.

This marks the fourth batch of VLGC orders secured by HD Korea Shipbuilding & Offshore Engineering since entering the second quarter. On April 3, the company announced an order from Greek shipowner Oceangold for two 90,000 cubic meter LPG dual-fuel VLGCs, with a total contract value of 349.8 billion won (approximately US$232 million, RMB 1.596 billion), equivalent to a unit price of US$116 million per vessel. These two VLGCs will be built at HD Hyundai Samho in Yeongam County, South Jeolla Province, with sequential delivery planned by the end of June 2029.

On April 16, HD Korea Shipbuilding & Offshore Engineering announced another order for two VLGCs from Turkish energy giant Aygaz, with a total contract value of 346.6 billion won (approximately US$235 million, RMB 1.6 billion), equivalent to a unit price of US$117.4 million per vessel. These two VLGCs will be built by HD Hyundai Samho and delivered sequentially by the end of June 2029.

On April 17, HD Korea Shipbuilding & Offshore Engineering announced it had secured an order for four VLGCs, with a total contract value of 674.7 billion won (approximately US$456 million, RMB 3.12 billion), equivalent to a unit price of US$114 million per vessel. These four VLGCs will be built by HD Hyundai Heavy Industries and delivered sequentially by the end of December 2029. The order is reportedly from energy trading company BGN International, the world's sixth-largest independent energy and commodity trading group.

Including the latest order, HD Korea Shipbuilding & Offshore Engineering has secured 11 VLGC orders within approximately one month, with a total value of about RMB 8.6 billion.

Additionally, on April 3, HD Korea Shipbuilding & Offshore Engineering announced an order from an Oceania-based shipowner for two medium-sized LPG carriers, with a total contract value of 239.3 billion won (approximately US$159 million, RMB 1.092 billion), equivalent to a unit price of US$79.4 million per vessel. These two LPG carriers will be built at HD Hyundai Heavy Industries, with sequential delivery planned by the end of June 2028.

As of June 2025, the VLGC orderbook stands at 179 vessels, representing a high ratio of 44% of the current fleet capacity. Average VLGC deliveries are expected to be high from 2025 to 2028, with particularly significant delivery pressure in 2027. By 2028, over 111 VLGCs are expected to be delivered, increasing the fleet size by more than 25%. Consequently, the VLGC construction market in 2026 presents a landscape of strong demand coexisting with potential supply pressure. Market fundamentals are sound, but high newbuilding prices and the upcoming delivery peak will prompt major shipowners to adopt cautious strategies.

Notably, since the outbreak of the US-Israel-Iran war at the end of February this year, global shipping markets, including the VLGC transportation market, have been significantly disrupted. Approximately 30% of global LPG trade transits through the Strait of Hormuz, with major exporters including Iran, the UAE, Qatar, and Saudi Arabia. The war has obstructed passage through the strait, with LPG vessel traffic in the region "dropping to near zero," tightening market supply and demand. VLGC spot daily earnings surged notably in early March 2026, with freight rates on the Middle East-Japan route rising about 50% compared to pre-war levels. The current freight rate increase could stimulate shipowner ordering over the next 6-12 months. Clarksons noted that before the war, approximately 21 VLGCs were located in the Persian Gulf region, accounting for about 5% of the global VLGC fleet capacity; their detention or rerouting has exacerbated short-term structural capacity tightness.

Some analyses also suggest that the United States may increase LPG exports to markets like Asia to alleviate supply tightness. If US exports rise, it will stimulate demand for medium-sized LPG carriers, particularly suitable for trans-Pacific routes.

To date, HD Korea Shipbuilding & Offshore Engineering has accumulated orders for 86 vessels this year, totaling US$9.35 billion (approximately RMB 64.17 billion), achieving 40.1% of its annual order target of US$23.31 billion. By vessel type, the orders include 12 LNG carriers, 20 container ships, 18 LPG/ammonia carriers (including 2 liquefied CO2 carriers), 7 crude oil tankers, 26 product/chemical tankers, 2 pure car and truck carriers (PCTCs), and 1 specialized icebreaker.

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