Tsuneishi Zhoushan Shipbuilding is constructing a large series of post-panamax bulkers to an upgraded in-house design and has also emerged as equity partner with a low-key Shanghai shipowner in an order for four of the ships.

The four 99,000-dwt "Tess 99" bulkers, an optimised version of the yard's Tess 98 model, are set to be delivered in 2019 and 2020 to an affiliate of Shanghai-based Safargo Shipping with equity participation by the shipbuilder.

In addition to the joint-venture quartet, Tsuneishi Group shipowning vehicle Kambara Kisen is also understood to be building a number of ships to the new design for its own account.

Reworked design

The reworked Tier II design, also marketed as a "Zhoushan-max", is primarily intended for the US-China soybean and grain import trade. It is meant to take full advantage of a 100,000-dwt dry-dock limitation at Tsuneishi's Chinese facility.

Directly comparable vessels are difficult to find. VesselsValue prices one 98,900-dwt ship set for delivery next month from Japan's Oshima Shipbuilding at $32.5m and a 106,000-dwt post-panamax set for delivery in a year's time from Shanghai Shipyard at just $26.6m.

Tsuneishi Zhoushan's joint-venture partner Safargo Shipping is in turn a joint venture between privately owned soybean crusher company Shandong Bohi Grains and Oils and Shanghai-based grain freight broker Vertical Horizon.

Vertical Horizon is controlled by grain freight broker Liu Gang, who also serves as managing director of Safargo. Safargo and Vertical Horizon are based in Shanghai, although Safargo is incorporated in Singapore.

Little-known Safargo is listed as the owner of one kamsarmax but financial sources say it controls two Tsuneishi Zhoushan sisterships, the 81,900-dwt Valiant Spring (built 2015) and 81,600-dwt Valiant Summer (built 2016), under a finance lease through Bank of Communications Financial Leasing. One of the ships is understood to be time chartered out, the other is employed on proprietary cargoes of venture partner Bohi.

Orders upsized

Although reference sources list several more kamsarmaxes as on order, TradeWinds understands that Safargo replaced them with the post-panamax series.

The owner is said to have told the shipbuilder last year that it did not plan to continue the series, and the yard countered with an offer to build 99,000-dwt ships at no additional cost. When this did not persuade Safargo, Tsuneishi Zhoushan offered to take an equity stake.

It remains unclear how Safargo plans to employ the four post-panamaxes, which are too big to berth at many of the South American ports where the company's kamsarmaxes trade.

Safargo partner Bohi is one of China's major soybean importers and livestock feed producers. According to a report by Reuters last week, the company has cut back on production as an effect of the US-China trade war. Lower pork prices and declining demand for livestock feed in the Chinese domestic market has also affected demand.

Chinese importers tell TradeWinds no soybeans have been ordered from the US for the fourth quarter of the year, but that they expect to have to do so eventually despite any tariffs.

Officials of Tsuneishi Group, Safargo and Vertical Horizon could not be reached for comment.