- Hong Kong-headquartered Cido Shipping has jumped on the very large ammonia carrier trend with a $250m investment in newbuildings.
- The shipping tonnage provider is named as the buyer behind an order for two VLACs in South Korea.
Hong Kong-based shipowner Cido Shipping has entered the very large ammonia carrier (VLAC) newbuilding market, signing a new contract with a South Korean shipyard, reports Riviera Maritime Media.
On October 15, Hyundai Group’s HD Korea Shipbuilding & Offshore Engineering (HD KSOE) announced an order for two VLACs, valued at approximately US$249M, for an undisclosed Oceania-based shipowner. Shipbuilding and market sources told Riviera that Cido Shipping is behind this deal, with the vessels slated for delivery in the second half of 2027.
Various shipping platforms describe Cido Shipping as a diversified maritime player, operating a fleet that includes tankers, bulk carriers, vehicle carriers, and LPG carriers. The company is also linked to an orderbook of over 20 vessels, spanning tankers, bulk carriers, and container ships. This contract with Hyundai represents Cido’s first venture into the VLAC segment.
Hyundai disclosed that it has received orders for 169 new vessels this year, worth nearly US$19Bn. South Korea’s major shipbuilder has a substantial orderbook, including approximately 48 LPG/ammonia carriers.
Growing interest in VLACs
Since mid-2023, shipowners have shown increasing interest in the VLAC sector, with a wave of newbuilding orders.
Yiannis Lardis, S&P broker at Weberseas, told Riviera that a total of 47 VLACs have been contracted so far this year. However, many of these newbuilds are expected to serve the LPG trade in their initial years, until a more stable ammonia market is established.
South Korean shipyards have secured the majority of VLAC contracts. According to Weberseas, South Korean shipbuilders have signed newbuilding deals for 37 vessels for 2024, accounting for about 79% of the total orders, while the remaining contracts have gone to China, particularly to Jiangnan.
The most recent agreement was signed between Jiangnan Shipyard and Adnoc Logistics & Services, through its joint venture with Wanhua Chemical Group, AW Shipping, for two additional 93,000-cbm gas carriers, as part of options from a previously signed deal.
Notably, recent orders reveal that VLAC pricing is similar between the leading shipbuilding nations, South Korea and China. The price per unit this year ranges between US$117M and US$125M.
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Source: Riviera Maritime Media
