Greek shipping company Danaos Corporation has returned to China State Shipbuilding Corporation (CSSC) Dalian Shipbuilding Industry Corporation (DSIC) to order additional container vessels and announced a moratorium on new vessel orders.
DSIC Signs Five 9,200 TEU Container Vessels for $104 Million Each
According to Danaos’ recently released Q2 2024 and semi-annual results report, the company has placed an additional order with DSIC for one 9,200 TEU mid-sized container vessel during the reporting period, bringing its order book for this container vessels at the shipyard to five units. The order for the first four 9,200 TEU container vessels was made public last month, with a single-vessel cost of $104 million, and on this basis, the total value of the five new vessels is $520 million (about RMB 3.732 billion).
According to Danaos Corporation’s report that during the second quarter of 2024, Danaos Corporation took delivery of the first three newbuilding containerships, namely one 7,165 TEU and two 8,010 TEU vessels that have commenced their three-year charters. Additionally, during the second quarter of 2024 and through the date of this release, the company added 6 newbuilding containerships to its orderbook. These six newbuilding orders comprise of one additional 8,258 container vessel to be built at Yangzijiang shipyard in China expected to be delivered in 2027 and five 9,200 TEU container vessels to be built at DSIC in China, three of which have expected deliveries in 2027 and two in 2028.
The company now has secured multi-year charter arrangements for all of the vessels in its newbuilding orderbook with an average charter duration of approximately 4.5 years weighted by aggregate contracted charter hire.
Over the past two months, Danaos Corporation added approximately $900 million to its contracted revenue backlog, which includes approximately $203 million through forward two-year charter fixtures for nine existing container vessels and approximately $697 million of revenue backlog through a combination of new charters and charter extensions for 12 of its newbuildings.
As a result, total contracted cash operating revenues, on the basis of concluded charter contracts through the date of this release, currently stand at $3.2 billion. The remaining average contracted charter duration for the containership fleet is 3.4 years, weighted by aggregate contracted charter hire.
Contracted operating days charter coverage for its container vessel fleet is currently 99% for 2024 and 80% for 2025. This includes newbuildings based on their scheduled delivery dates.
Danaos Corporation has now taken delivery of all of its contracted capesize bulk carriers by taking delivery of two vessels in the second quarter of 2024 and one vessel in July 2024. As a result, the capesize dry bulk fleet currently stands at 10 vessels with an aggregate DWT capacity of approximately 1.8 million DWT.
Danaos decides to stop shipbuilding for a while after placing consecutive orders for 20 new vessels
With the official announcement of DSIC’s fifth order for 9,200 TEU container vessels, Danaos has ordered a cumulative total of 20 newbuild container vessels since December 2020, three of which have been delivered, with an average charter period of approximately 4.5 years.
The 20 new vessels are 7 8258 TEU container vessels of Yangzijiang Shipbuilding, 5 9200 TEU container vessels and 2 7165 TEU container vessels of DSIC, 2 6014 TEU container vessels of Qingdao Yangfan, and 4 8010 TEU container vessels of DH Shipbuilding. Among them, DSIC has delivered one 7165TEU container vessel “Interasia Accelerate”, DH Shipbuilding has delivered two 8010TEU container vessels “Catherine C” and “Greenland”, “Greenland”.
On August 6, Danaos CEO John Coustas said during a conference call on the company’s second quarter results: “The additional order for DSIC will be the company’s last order for the foreseeable future. Now faced with a situation where the earliest delivery date for new vessels will have to wait until after 2028, but it is not yet possible to take into account the market situation four years from now and with the current geopolitical situation being ‘unsatisfactory’, the company has decided to stop ordering new vessels for the time being.”
According to the official website, Danaos Corporation is a modern, large-scale independent shipping company for container vessels, which currently has a diversified fleet of 70 container vessels and 10 bulk carriers.