Maersk suspends methanol ship order to Chinese shipbuilder

Maersk, the world’s second-largest shipping company, has reportedly postponed an order for 15 methanol-powered container ships from a Chinese shipbuilder. The delay is reportedly due to Maersk’s objections to design drawings submitted by the Chinese shipbuilder. Experts say this means South Korean technology has once again proven to be better than Chinese technology when it comes to high-value ships.

According to shipbuilding and shipping magazine TradeWinds on May 9, Danish shipping company Maersk recently informed Huangpu Wenchong Shipbuilding, a subsidiary of China Shipbuilding and Shipping Corporation (CSSC), that it would postpone the order. The project will reportedly be reconsidered in the second half of this year. Industry observers say it is unusual for the world’s second-largest shipping company to delay construction of a ship it has chosen as a key vessel for the future.

Maersk signed a contract with the company in December last year to order up to 15 3,500 TEU container ships. The contract has a total value of $1.02 billion. Although the ships were not large, they were distinguished by the fact that they were ordered from a Chinese shipbuilder, as they were ships powered by a next-generation fuel, methanol.

It is not clear why Maersk decided to suspend the project. Korean shipbuilding industry insiders believe the Chinese shipbuilder’s drawings did not meet Maersk’s standards. The decision to postpone the project came at a time when the shipbuilder submitted his drawings and the drawings were revised and checked at the request of the customer after signing a commission contract. However, given the high penalty associated with contract cancellation, there is a small chance that Maersk will cancel the order itself. “I think Maersk has said it will restart the project if it is satisfied with the Chinese shipbuilder’s design technology,” an industry insider said.

After liquefied natural gas (LNG), one of two marine fuels of choice for the future is ammonia or methanol. This year, Chinese shipbuilders worldwide exceeded orders for methanol-powered ships, while Korean shipbuilders took all orders for ammonia-powered ships. “If China continues its track record of building methanol ships and becomes competitive in the high-value ship market, some shipping companies could turn to methanol instead of ammonia,” an industry observer said.

However, with this case in the spotlight, Korean shipbuilders could have an advantage if shipping companies order methanol-powered ships. In January, HD Hyundai Heavy Industries announced the world’s first methanol-fueled container ship. “Shipping companies are more likely to order container ships from Korean shipbuilders even if the delivery time is late as they prioritize operational stability,” an industry observer said.