Belgian shipowner Compagnie Maritime Belge (CMB) has snapped up an order for an additional 10 dual-fuel newcastlemax bulk carrier newbuildings worth in total $640m, as yard prices start to ease off in China.
Shipbuilding sources said the company had seized a “window of opportunity” and returned to Qingdao Beihai Shipbuilding Heavy Industry to book the ships that will be delivered in 2025 and 2026.
CMB confirmed it has now lifted the total number of 210,000-dwt dual-fuel bulk carriers at the state-owned yard to 20, without adding further comment.
Of the earlier 10 vessels — eight were ordered last year at about $61m per ship and two in March 2022 at $66m each.
Sources said CMB is paying $64m apiece for its latest tranche of ammonia-ready newcastlemaxes — $2m per ship less than the pair of vessels it booked in March.
Brokers said “low shipbuilding activity” at Qingdao Beihai likely prompted the state-owned shipyard to offer CMB an attractive newbuilding price for the deal.
There has been a lack of investment in the sector this year. Before the CMB order, only 18 large bulk carriers had been ordered in 2022.
“The shipyard may have also offered a good payment scheme to the Belgian owner,” said a shipping source.
Shipbuilding sources suggested CMB is taking advantage of the recent fall in the price of bulker newbuildings to block out the shipyard’s berths for newcastlemax vessels.
They said some Chinese shipyards have lowered their price on the back of a decrease in steel plate prices and a stronger US dollar. The price of steel plate has fallen to about CNY 4,800 per tonne from a high price of CNY 5,700 per tonne due to China’s economic slowdown.
Hope for recovery
“China is starting to ease its Covid measures which sparks hope for a recovery in the country’s economy …when that happens, construction will take place and the price of steel plate may hike again,” said the broker.
“We do not think the price of newbuildings will drop to the level of two to three years ago as major Chinese shipyards’ orderbooks are packed and labour costs for shipbuilding continue to rise. Although we may see some smaller to medium-size shipyards lowering their prices for ultramax and kamsarmax bulkers.”
Shipbuilding sources said it is unlikely that the price for newcastlemaxes will continue to drop as berths for the large-size bulkers at Chinese shipyards are limited.
This has been made worse with some major shipbuilders turning their capacity to high-spec vessels with bigger profit margins, such as LNG carriers and large-size container ship projects.
“South Korean shipbuilders do not construct bulk carriers anymore. Japanese shipyards such as Nihon Shipbuilding are building the ship-type, but they are seeking over $80m per vessel due to expensive steel plate and labour costs,” said a shipowner in Asia.
Shipbuilding sources said that after securing the big-bulkers order from CMB, Qingdao Beihai has built up a strong orderbook and will be firm with its price.
They added that several shipping companies, including mining giants Vale and Rio Tinto, are enquiring about large-size bulk carriers but these projects are moving very slowly as the buyers cannot decide on the fuel option for the ships.
