China Merchants Energy Shipping (CMES) has drawn up newbuilding plans for up to 18 210,000 dwt Newcastlemax bulk carriers from two Chinese shipyards.
According to a May 9 report in Splash 247, shipbuilding sources said that Ming Wah Shipping, a subsidiary of CMES, has spent nearly $1.4 billion (RMB 10.11 billion) to order as many as 18 210,000 dwt bulk carriers from New Times Shipbuilding and China State Shipbuilding Corporation’s Qingdao Beihai Shipbuilding.
Specifically, New Times Shipbuilding will undertake for 8+2 newbuildings, each costing between US$76.5 million and US$78.0 million and expected to be delivered in 2028.
Beihai Shipbuilding will build eight newbuildings, of which six units, costing $76.5 million, are expected to be delivered in 2028, and the remaining two units, costing $80.5 million, are expected to be delivered in 2026.
The 210,000 dwt Newcastlemax bulk carrier is the mainstream type of ship receiving orders by Beihai Shipbuilding. The company has made public orders for 15 new bulk carrier this year, with 12 of the ammonia-reserved design and three of the liquefied natural gas (LNG) dual-fuel design.
Among them, three LNG dual-fuel-powered bulk carriers were ordered by Japan’s shipping giant MOL. And the 12 ammonia-preserved design bulk carriers were ordered by Singapore’s Eastern Pacific Shipping, Berge Bulk Singapore, and Belgium’s tanker giant Euronav，the numbers are 8, 2 and 2 respectively.
It is worth noting that the last time for New Times Shipbuilding to undertake a bulk carrier can be traced back to 2021. Bulk carrier shipping company Himalaya Shipping placed an order with New Times Shipbuilding for the construction of 8+4 LNG dual-fuel-powered Newcastlemax bulk carriers at that time with a cost per unit ranging from $67 million to $68 million. If this bulk order of 8+2 vessels from CMES is officially confirmed, it will be the second time for New Times Shipbuilding to undertake super-large bulk carriers after 3 years.
Arrow, the global independent shipbrokerage group, has pointed out that prices in the newbuilding market seem to be increasing “dramatically”, with the benchmark newbuilding price for Newcastlemax bulk carriers from Chinese shipyards rising by more than 10 % in three weeks.
Taking the order for four Newcastlemax bulk carriers received by Qingdao Yangfan from Seatankers Management in mid-April this year as an example, the cost of a single unit was about $68 million at that time, and the delivery date was scheduled for 2027 to 2028. In comparison, CMES’ order for bulk carriers of the same type is at least $8.5 million (RMB 61.38 million) more expensive each.
Arrow said: “The lack of capacity to build large bulk carriers is the main reason for the increase in the cost of Newcastlemax bulk carriers, and shipyards having secured newbuilding orders with higher returns in other newbuilding markets.”
Although the overall order book for standard Capesize (180,000 dwt) bulk carriers remains low, bulk carriers shipping companies have been significantly more keen to order very large bulk carriers over the past 18 months, the report said. By contrast, the order book for Newcastlemax bulk carriers is five times larger than that for standard Capesize bulk carriers.
The growth in orders for Newcastlemax bulk carriers was discussed during the Geneva Dry iron ore conference last week. William Fairclough, general manager of Hong Kong shipping company Wah Kwong Shipping, pointed out that the difference between the newbuilding price of Newcastlemax and Capesize bulk carriers is only $2 million to $3 million, and Chinese shipyards are more inclined to get orders for Newcastlemax bulk carriers. However, John Michael Radziwill, head of C Transport Maritime in Monaco, is more bullish on standard Capesize bulk carriers, which he believes are more flexible in size.