Wanhua Chemical is known as the "Huawei of the chemical industry", and its MDI production is well-known all over the world.
Recently, the news that Wanhua Chemical Group ordered four 99,000 cubic meters of super-large ethane transport ships to Jiangnan Shipyard for 512 million US dollars (equivalent to about 3.2 billion yuan) has also attracted widespread attention inside and outside the industry.
Many netizens commented: Is Wanhua Chemical going to be the rhythm of the shipowner?
In fact, charter ships are a more common way in the industry, such as satellite chemistry, which also relies heavily on super-large ethane carriers, it is leased rather than directly ordered.
Because not to mention the high purchase cost of ships, from the perspective of utilization alone, owned ships are actually not cost-effective. In addition, post-maintenance and related labor is also a large expense, and once the operation is not good, it will become a bottomless pit.
VLECB cabin
So why did Wanhua Chemical spend thousands of dollars to buy a ship?
The first thing that comes to mind is its own needs.
It is understood that in 2021 alone, Wanhua Chemical achieved a net profit of 24 billion yuan to 25.2 billion yuan, an increase of 139% to 151% year-on-year. According to its announcement, the performance growth is mainly due to the global economic recovery, the boost of market demand, the price increase of chemical products, and the company's MDI technical transformation, new production capacity such as ethylene, and new equipment put into operation.
In connection with the super-large ethane transport ship ordered this time, Frontier Jun speculates that it is likely to have a large relationship with its new production capacity such as MDI technical transformation and ethylene.
Because of the increase in market demand, wanhua chemical production capacity is stimulated, but in order to prevent shipping from "stuck neck", the logic of self-purchase of ships works.
But in the process of understanding "Wanhua's entry into shipping", Qianfengjun felt a little confused.
First, in 2020, Wanhua Chemical formed AW Shipping Limited as a joint venture with a subsidiary of Abu Dhabi National Petroleum Corporation (ADNOC).
Could it be that this purchase of the ship is Wanhua's intention to enter the shipping market in the overall situation?
But Frontier Jun saw something different in the subsidiary agreement formed by Wanhua, that is, the agreement stipulated that the company would transport LPG goods and other petroleum products from ADNOC and global suppliers to Wanhua Group's manufacturing bases in China and around the world.
That is to say, for Wanhua, the greatest significance of AW Shipping Limited is to build a feasible and stable raw material channel.
From this logic, this is a primary and secondary issue in the shipping and chemical industries. It is speculated that Wanhua Chemical is obviously unreliable because it sees profits in investing in ships and then builds its own fleet.
And if Wanhua builds its own fleet to share a piece of the pie just because it wants to earn money for shipping, it is likely to destroy the friendship between the two sides of the cooperation.
What is Wanhua's real intention to buy a ship?
In addition, the five 86,000 cubic meter dual-fuel VLGC series vessels ordered by AW Shipping Limited will be delivered as early as the third and fourth quarters of this year, and the other two ships will not be delivered until January and March 2023.
For the new super-large ethane carriers ordered by Fenwanhua Chemical, the first batch of 2 new ships will be delivered in 2025, which is later than the delivery time of AW Shipping Limited.
Frontier Jun believes that wanhua chemical's biggest move is to use it as a reserve and prepare for expanding international cooperation, rather than spreading the news that Wanhua will transform into a ship. What do you think about that?
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