Container freight rates continue to trend upward. The Drewry World Container Index rose 10% this week and has reached US$5,868 per 40-foot container, up 298% from the same period last year. This makes the third quarter of this year is expected to become one of the most profitable quarter in the history of container ship owners.
Container ship owners who have money have opened the “buy buy” mode, some of them to build new ships, some buy second-hand ships, the remaining some shipowners directly increase the price to buy the recent delivery of new ships under construction.
On July 5, Bal Container Line’s parent company, LC Logistics, announced the transfer of two 14,000 TEU container ships under construction to two special-purpose companies, Laudine Oceanway and Aludra Oceanway, which are reportedly owned by shipping giant Mediterranean Shipping Company (MSC).
MSC acquired the two newbuildings under construction for a total price of US$333 million, of which US$133.3 million was paid to Bal Container Line and US$196.7 million will be paid to the shipyard over time for subsequent construction costs. In addition, a payment of US$3.3 million will be made to Bal Container Line for equipment already ordered upon delivery of the ships.
Bal Container Line has now made two down payments to the shipyard totaling $84.3 million (30%), which means that Bal Container Line has earned a profit of $49 million (Rs. 350 million) on this transfer.
It is understood that the two new shipbuildings are ordered by Bal Container Line in 2022 at Jiangnan Shipbuilding, with a contract price of US$281 million, and are scheduled to be delivered in 2025, and Bal Container Line also owns two options. However, until March this year, the first ship H2789 officially set to build, the second ship H2790 set to build in May this year.
It is worth mentioning that Bal Container Line is still ready to continue placing orders for container ships in Jiangnan Shipbuilding in the near future.
In May 2024, Bal Container Line signed a letter of intent (LOI) with Jiangnan Shipbuilding for the construction of 2+2 14,000 TEU container ships at a price of at least US$150 million each, and if all the option orders come into effect, the total value of the order for the 4 new ships will be at least US$600 million. The new ships will use conventional fuel and be fitted with desulphurization towers, with the first two expected to be delivered by the end of 2027.
