South Korea’s flag carrier is dramatically shifting course on new vessel orders in a move that could be a warning signal to global shipping.
Hyundai Merchant Marine (011200.KS), the world’s eighth-largest liner, said it will pause finalizing newbuild orders for at least 10 additional 13,000-TEU liquefied natural gas dual-fuel container ships that were planned for the second half of 2026.
Instead, it is tilting toward energy transportation, focusing on Suezmax tankers; medium-range (MR) petroleum tankers; very large gas carriers (VLGCs); and LNG carriers.
HMM has capacity of 1.01–1.03 million container units across a fleet of around 70–97 vessels, making it the only Korean liner in the global top‑10 by capacity. It rosters a mix of ultra‑large 24,000‑TEU ships, including two of the largest ships currently operating, and smaller feeders. The primary global container line plies major east–west Asia–Europe and Asia–North America trades.
The company posted revenue of $7.5–$7.7 billion in 2025. This was down about 7%–9.5% y/y from 2024’s $8.5 billion, but far ahead of Korean peers Pan Ocean, Sinokor, SM Line, and KMTC.
Recent orders and deals include more than $1 billion for eight new bulk and two gas carriers with deliveries through 2031; and a resale contract for four very large container carriers (VLCCs) with delivery in 2029.
Including earlier orders, HMM will have six new VLCCs on order; once delivered, its VLCC fleet will reach 20 vessels. It also has a joint venture with energy trader BGN to operate two new 88,000 m³ VLGCs.
But the carrier in June echoed a core outlook warning of newbuild-driven oversupply, geopolitical cost pressure, and trade-policy risk.
“(Global) market uncertainties are expected to grow due to increased vessel capacity from newbuild deliveries, rising costs associated with the Middle East crisis, and U.S. tariff policies,” HMM said in its Q1 2026 earnings release.
East-west network enhancements announced in late 2025 covering Asia-Europe, Asia-North America, and Asia-Middle East use extra capacity from newbuilds delivered in 2025-2026.
HMM said it will launch new routes to Africa using a hub-and-spoke model and pursue new demand in Southeast Asia.
In the Shinhan Investment & Securities in a July 22 forecast for HMM in Q2 2026 pegged revenue at $2.21 billion, ahead 25% y/y, and operating profit of $291.8 million, up 80.4% y/y. This is above the market consensus operating profit estimate of $240 million, as reported by AJP News Agency.
The full-year 2026 outlook by Shinhan, revised upward, is for revenue of $8.9 billion, an increase of 17.6% y/y. Operating profit comes in at $1.2 billion, better by 19.8%.
The new operating profit forecast is 75.9% higher than Shinhan’s prior estimate, AJP reported. Despite the improved numbers, Shinhan kept a Neutral rating and did not give a target price.
HMM reports second quarter results in August.
Read more articles by Stuart Chirls here.
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