Chinese shipyards with large orders. COSCO orders 15 large bulk carriers

COSCO Shipping Development approved the order of 15 Newcastlemax massage carriers with a load capacity of 210 thousand tons each. The ships will build two Chinese shipyards, and the total value of the contracts is 7.92 billion yuan, or about 1.1 billion dollars.

Fifteen large bulk carriers for COSCO

Before going to the details of the order, it is worth explaining the role of COSCO Shipping Development. It is not a classic shipowner, but a member of the COSCO Shipping group, a company which is involved in the financing and leasing of ships and containers. It orders the units, remains the owner of them and then returns them in a multi-annual charter to the companies responsible for their operation.

The same model was used for the latest order. Ten ships will build Shanghai Waigaoqiao Shipbuilding, belonging to the China State Shipbuilding Corporation group, and five more will be built in Nantong Xiangyu shipyard.

Each bulk ship was valued at 528 million yuan before tax. COSCO Shipping Development intends to cover 25% of the investment costs from its own resources, while the remaining 75% will be financed by bank loans.

Units built in Nantong Xiangyu are to be transferred from May to December 2030. Delivery of the series formed in Shanghai Waigaoqiao Shipbuilding was planned from June to December of the same year.

Order includes bulk carriers Newcastlemax type with a load capacity of 210 000 tonnes. Ships of this size are primarily used to transport iron ore from Brazil and Australia to China, as well as Australian coal to customers in Asia.

Ships prepared for subsequent conversion

All bulk carriers will be constructed for subsequent conversion to a drive using methanol or ammonia. However, this does not mean that they will be powered from the beginning by one of these fuels.

This option leaves the possibility of changing the way of propulsion in the future, without prejudging already at the construction stage whether COSCO decides on methanol or ammonia.

The bulk carriers will go to one of the COSCO Group companies

After receiving from the yard, all ships will be surrendered for 20 years in a charter to Wai Fung Shipping, owned by COSCO Shipping Bulk. The maximum annual charter rate for each bulk ship was set at 59.4 million yuan before tax.

The rate also includes the potential cost of later conversion of the vessel to dual-fuel drive. COSCO Shipping Development will remain the owner of bulk carriers, while Wai Fung Shipping will be responsible for their operation.

The latest contracts are another element of COSCO's replacement and expansion program for the bulk fleet. Recently Chinese the group has concluded contracts and leasing agreements covering dozens of new ships intended for the transport of dry bulk cargo.