Shipping Industry Soars, HMM Expects Annual Revenue of 10 Trillion Won

HMM Jakartaho

[Asia Economy Reporter Dongwoo Lee] The domestic shipping industry is expected to record its highest-ever performance in the second quarter, buoyed by high freight rates.

According to financial information firm FnGuide on the 25th, HMM, the largest deep-sea shipping company in Korea, is projected to surpass 10 trillion KRW in annual sales for the first time in its history, reaching 10.1088 trillion KRW. Its sales for the second quarter of this year are also expected to be 2.5097 trillion KRW, with an operating profit of 1.0289 trillion KRW, continuing the trend of operating profits exceeding 1 trillion KRW for two consecutive quarters following the previous quarter.

The industry analyzed that the high freight rates for container ships will continue through the second half of this year, leading to a clear improvement in shipping companies' performance. The Shanghai Containerized Freight Index (SCFI) stood at 3,748 points as of the 18th, rising for five consecutive weeks and increasing 3.79 times compared to the same period last year (988 points).

In particular, congestion at major West Coast ports in the U.S., such as Long Beach and Los Angeles (LA), has persisted, causing freight rates for vessels rerouted through the East Coast to rise sharply, approaching 9,000 USD. This is due to a surge in global cargo volume, delays in shipments at major North American ports, and COVID-19 infections among key port workers.

HMM aims to achieve a total fleet capacity of 1 million TEU by next year by completing the acquisition of eight 16,000 TEU-class vessels by this month and placing new orders for twelve 13,000 TEU-class vessels.

Pan Ocean, which mainly transports grains, coal, and iron ore, is also expected to post record-high results in the second quarter. Daishin Securities projected Pan Ocean’s second-quarter operating profit at 94.5 billion KRW, exceeding market expectations by more than 15%, with sales of 938.6 billion KRW.

Some suggest that Pan Ocean could surpass 1 trillion KRW in quarterly sales, supported by rising bulk carrier freight rates. The Baltic Dry Index (BDI) for the second quarter rose nearly 1,000 points year-on-year to over 2,700 points, driving sales.

Yang Ji-hwan, a researcher at Daishin Securities, said, “It is estimated that the positive second-quarter performance was achieved through leverage effects and aggressive base operations in time charters secured proactively for periods of six months to one year.”