After splashing out $1.32bn on Q-Max LNG carrier newbuildings, shipping giant China Merchants Energy Shipping (CMES) is set to fork out close to $950m on a series of large bulk carriers.
The Shanghai-listed, Hong Kong-headquartered shipping company is said to be ordering a dozen newcastlemax newbuildings that will be powered by conventional marine fuel.
Should CMES firm up the orders, the deals would be the company’s first contract for large bulkers in nine years, according to VesselsValue.
John Fredriksen’s Seatankers Management, Eastern Pacific Shipping, K Line, CMB.Tech and Berge Bulk are among the shipping companies ordering newcastlemax bulkers in 2024.
Sources noted that CMES’ contract also comes as Beijing has been calling for Chinese seaborne trade to be carried by domestic vessels.
Shipbuilding players said CMES is finalising the deal with two domestic shipyards — state-owned Qingdao Beihai Shipbuilding Heavy Industry and privately owned New Times Shipbuilding — for the series of 210,000-dwt vessels.
They said the 12-ship order would be split equally between the two.
Shipyards officials were not available for comment. CMES has been contacted for comment.
Sources said the newcastlemax bulker newbuildings at New Times would cost CMES about $78m apiece while the bulkers at Qingdao Beihai are priced at about $80m each.
The additional $2m per ship at Qingdao Beihai buys vessels equipped with shaft generators with delivery for the sextet spread between 2027 and early 2029.
As for newbuildings at New Times, the Jiangsu-based shipyard is scheduled to deliver the six standard conventional bulk carriers in 2028.
VesselsValue shows the last time CMES invested in big bulkers was in 2015 when it ordered 10 VLOCs.
It split the 10-ship order between three shipyards: Shanghai Waigaoqiao Shipbuilding and Qingdao Beihai each receiving four vessels each and China Merchants Heavy Industry two.
It took delivery of the 400,000-dwt ore carriers in 2018 and 2019.
Clarksons’ Shipping Intelligence Network estimates the orderbook for bulkers between 100,000 dwt and 325,000 dwt at 116 units, of which 19 were ordered this year excluding CMES’ newbuildings.
Six of the 19 bulker newbuildings will run only on conventional marine fuel while the remaining vessels are ammonia ready.
CMES is a diversified shipping company with a fleet of over 300 vessels.
According to SIN, the firm has 39 newbuildings on order at domestic shipyards that include one VLCC, 12 LNG carriers, four aframax tankers, four kamsarmaxes, four heavylift 62,000-dwt ships, six car carriers, four handysize bulk carriers, two small chemical/product tankers and two passenger ships.
The company disclosed an operating income of CNY 6.254bn ($866.6m) in the first quarter of 2024 — an increase of 6.3% year on year. Its net profit surged by 22.62% to CNY 1.375bn.
It stated that the hike in earnings was due to a larger fleet and an improvement in tanker and bulker markets.
