Over 120 ships! Chinese shipping companies sweep across the LR2/Aframax oil tanker market

China's shipbuilding industry continues its strong momentum. So far this year, it has won nearly 70% of the orders for LR2/Aframax tankers. Recently, it has won the first order from Türkiye's shipowners to enter the LR2 market, further consolidating its leading position in the global tanker construction market.

According to trade wind news, Türkiye's shipowner Yasa Shipping has ordered two 114000 dwt LR2 product oil tankers in Shanghai Waigaoqiao Shipbuilding and Dalian Shipbuilding respectively, which are expected to be delivered in 2026. It is understood that the cost of each new ship is about 72.5 million US dollars, and the total order value is about 290 million US dollars (approximately RMB 2.101 billion).

As a reference, according to Clarkson's data, the current shipbuilding price for a 113000-115000 deadweight ton LR2 Aframax tanker is $72 million, a 9% increase from $66 million in the same period last year.

This is Yasa Shipping's first order for LR2 finished oil tankers. It is understood that Yasa Shipping was founded in 1999 and currently operates a fleet of 53 ships, including 39 bulk carriers and 14 oil tankers. The bulk carrier fleet includes 1 Newcastlemax, 1 Cape of Good Hope, 14 Panamax, 6 Ultramax, 8 ultra flexible, and 9 flexible. The oil tanker fleet includes 2 VLCCs, 1 Suez, 3 Aframax, and 8 MR.

In recent years, Yasa Shipping's booking activities have mainly focused on bulk carriers, until the company signed a construction contract with Yangtze River Shipyard in the middle of last year for four 50000 deadweight ton finished oil tankers, ending its three-year shortage of new oil tanker orders. These four new ships are expected to be delivered in 2026.

In addition, the company currently has four 63600 deadweight ton Ultramax bulk carriers ordered by COSCO Shipping Heavy Industry in Zhoushan, three 40500 deadweight ton open vessels ordered by Nanyang Shipbuilding in Jiangmen, and seven new vessels are expected to be delivered in 2025.

The latest order from Yasa Shipping further consolidates the leading position of Chinese shipping companies in the LR2/Aframax tanker sector. It is understood that this field of ship types was once dominated by South Korean shipping companies, but in the past two years, shipping companies have been attracted by competitive prices and early delivery times, and have turned to China one after another.

According to Clarkson's data, as of now, LR2/Aframax tankers hold a total of 204 orders of 23.38 million deadweight tons, of which as many as 123 new ships under construction with 14.06 million deadweight tons are built by Chinese shipping companies, accounting for over 60%.

Especially this year, out of a total of 22 new orders for 2.52 million deadweight tons of LR2/Aframax oil tankers worldwide, Chinese shipping companies have received 15 of them, with a market share of nearly 70%. Among them, Dalian Shipbuilding received 4 ships, Dalian Shipbuilding Shanchuan Heavy Industry received 3 ships, New Era Shipbuilding, Guangzhou Shipbuilding International, Waigaoqiao Shipbuilding, and Zhoushan Changhong International each received 2 ships; The other 7 orders were received by Hyundai Vinashin, a Vietnamese subsidiary of HD Hyundai Oita in South Korea.

In terms of individual shipyards, the top six shipyards holding orders are Waigaoqiao Shipbuilding (22 ships), Shanchuan Heavy Industry (21 ships), Modern Vietnam Shipbuilding (18 ships), New Era Shipbuilding (16 ships), Zhoushan Changhong International (16 ships), and Yangzhou COSCO Shipping Heavy Industry (16 ships), all of which are from China.

It is worth mentioning that in addition to leading in quantity, Chinese shipping companies have also taken on the world's first order of alternative fuel vessels in the LR2/Afra tanker sector. In 2022, New Era Shipbuilding delivered the world's first 111000 deadweight ton LNG dual fuel Afra tanker, which is also considered the world's first LNG dual fuel LR2 tanker.

At the end of December last year, Yangzhou COSCO Shipping Heavy Industry was awarded the construction contract for three 114200 deadweight ton methanol dual fuel Aframax tankers from COSCO Shipping Energy. This is the world's first order for methanol dual fuel LR2/Aframax tankers.

Last week, AEST, a subsidiary of Malaysian national shipping company MISC Berhad, signed a contract with Dalian Shipbuilding to build two 115000 deadweight ton ammonia dual fuel Aframax tankers. This is not only the world's first ammonia dual fuel LR2/Aframax tanker order, but also the world's first ammonia fuel powered tanker order, which strongly proves China's position and influence in the global shipbuilding industry.