Algoma Central Corp is being linked to a KRW 127bn ($96m) order for two product carriers at South Korean shipbuilder Hyundai Mipo Dockyard (HMD).
On Wednesday, HD Korea Shipbuilding & Offshore Engineering (HD KSOE) said it had won a contract from a “Canadian shipper” for the two vessels but did not name the party behind the business.
HD KSOE said the ships will be delivered by March 2025.
Shipbuilding sources following the tanker newbuilding market named Algoma as behind the order.
They said the price appeared to be in line with a 50,000-dwt MR tanker, but Algoma has ordered MR1 tankers of 37,000-dwt.
“The price difference between the two ship types is a few million dollars,” said one shipbuilding broker. “We believed Algoma has ordered high-spec vessels which explains the high newbuilding price for the handysize ships.”
Officials at HMD declined to confirm the buyer’s identity or disclose vessel specifications, citing contract confidentiality.
Based in Ontario, Algoma owns and operates bulk carriers and tankers on the Great Lakes and St Lawrence Seaway.
Tanker alliance
The company has seven dual-fuel 17,999-dwt product tankers under construction at China Merchants Jinling Shipyard in Yangzhou. The Vinga-class ships were ordered by Furebear — a 50:50 joint venture between Algoma and Sweden’s Furetank. The newbuildings are slated to be delivered by August 2025.
The tankers will be entered into the Gothia Tanker Alliance and operated by Furetank out of Gothenburg, Sweden.
In December 2022, Algoma acquired two secondhand product tankers from Valloeby Shipping to replace two older vessels trading on the Great Lakes.
It bought the 18,894-dwt sisterships Algotitan (ex-Chantaco) and Algoberta (ex-Chiberta, both built 2007) from the Malta-based chemical tanker owner.
Algotitan is trading on the Great Lakes and St Lawrence Seaway while Algoberta is commercially managed by Furetank and trading in northwestern Europe.
Early this month, Algoma posted an overall net loss of CAD 19.6m for the first three months of 2023, although the revenue skyrocketed 40% from a year earlier to CAD 34.5m, while operating costs shot up 24% to CAD 33.6m.
Newbuilding numbers
Its product tanker division recorded CAD 32.1m in first-quarter revenue, which was an increase of 78% from the same period of last year. The improvement was largely due to higher customer demand that boosted revenue days by 59%.
Algoma’s tanker operating earnings reached CAD 1.144mfor in the first quarter, compared with a loss of CAD 1.56m a year earlier.
Algoma is the fourth shipping company to have ordered tanker newbuildings at HMD this month. Japan’s Mitsui OSK Lines, trading house Mitsui & Co and Global Feeder Shipping from Dubai were the other three companies.
MOL ordered one 48,000-dwt dual-fuel methanol carrier while Mitsui & Co and Global Feeder each ordered two 50,000-dwt product tankers.
