China's Sinotrans Container Lines (Sinolines) has ordered feeder containership newbuildings at two compatriot shipyards in moves that saw it strike a rare newbuilding deal with a private sector shipbuilder.
The shipping company, part of state-owned China Merchants Group, has contracted Singapore-listed Yangzijiang Shipbuilding to build two 2,400-teu vessels to be delivered in the third quarter of 2023, a shipping source close to the deal said.
The order does not include options for additional ships.
The source said it is very rare to see a Chinese state-owned company sign up for newbuildings at a private sector shipyard like Yangzijiang. The deal is especially surprising because Sinolines sister company China Merchants Heavy Industries is involved in shipbuilding.
Officials at Yangzijiang declined to comment on the Sinolines contract. But the shipyard’s website announced the order, saying that the feeder boxship contract was its first piece of business from the shipowner.
The price for the newbuildings has not been disclosed, but shipbuilding brokers put it at around $30m each.
Shipbuilding players believe Yangzijiang will construct Sinolines’ boxships at its reopened yard, Jiangsu Yangzi Changbo. One of the four shipyards under Yangzijiang's control, the facility is restarting after a nine-year hiatus due to lacklustre demand for newbuildings at the time.
Yangzi Changbo is equipped with three slipways and is able to deliver six vessels each year.
In a separate transaction, Sinolines has also struck a deal with Jinling Shipyard to build two 1,100-teu newbuildings for 2023 delivery. Jinling is controlled by Sinolines parent China Merchants Group.
A Jinling executive confirmed the order and said the contract did not include options for additional ships.
Shipbuilding brokers believe Sinolines is paying around $15m for the 1,100-teu newbuildings.
The last time Sinolines ordered boxship newbuildings was in 2017, when it signed up for a single 1,140-teu vessel with a little-known shipyard called WUT Guangda. The Hubei-based shipbuilder delivered the Han Hai 5 Hao last year.
Sinolines became a subsidiary of China Merchants Group after the state-owned conglomerate merged with Sinotrans & CSC Holdings in 2017.
Sinolines operates feeder containership routes linking mainland China, Hong Kong, Japan, South Korea, Taiwan, Vietnam and Philippines. It also has one round-trip sailing per week to Australia.
The company’s website shows the 4,606-teu Northern Precision (built 2009) to be the largest containership it operates. Most of the vessels that it controls are below 2,000 teu.
