Citic Financial Leasing (Citic FL) is said to have returned to Dalian Shipbuilding Industry Co (DSIC) for five more bulker newbuildings for the Chinese domestic market.
Shipbuilding sources said the order lifts the total number of ultramax vessels that the Chinese leasing outfit has booked at the state-owned shipyard to 15.
TradeWinds has learned the ships were optional vessels that Citic FL held at the yard after inking deals for 10 newbuildings in April.
Officials at DSIC were not available for comment.
Bill Guo Fangmeng, head of shipping at Citic FL, confirmed the project, but told TradeWinds no contract had been signed.
“Chinese domestic bulker newbuildings have been neglected for 10 years or so because Chinese owners have preferred to focus on the international flag-of-convenience trades,” he told TradeWinds. “So demand is strong. It’s an interesting market.”
Meanwhile, other sources said Citic FL was recently given approval by the state to set up foreign special purpose vehicles for its dollar-denominated assets through its Tianjin office.
The company is a relative newcomer to ship finance.
“This approval translates that Citic FL will be able to carry out newbuilding contracts in dollar-based [deals] and the ships can be registered under flags of convenience and chartered out to foreign shipping operators,” said a shipbuilding broker.
Sources said although Citic FL is able to carry out dollar-based newbuilding contracts, the five-ship deal at DSIC was still renminbi denominated.
“Like the earlier 10 bulk carriers, these five newbuildings will be chartered by domestic companies and used for Chinese coastal trade,” said one shipping source.
He added that Citic FL has already lined up employment for the 15 ultramaxes, saying: “Citic FL would not order newbuildings on speculation.”
But Citic FL’s Guo commented that although the ships will be under the Chinese flag and are described as domestic, they will also be technically and legally eligible for international trading.
The charterers and details of the charter contracts were not disclosed but Cosco Shipping Bulk was previously reported to have fixed the first 10 vessels and deployed them on the Yangtze River and other domestic trades.
Citic FL’s Guo declined to comment if Cosco or another Chinese domestic owner would be the end user of the ships.
Shipbuilding sources believe Citic FL is paying CNY 200m ($31.5m) each for the Sdari-designed, 65,000-dwt vessels.
DSIC’s subsidiary Shanhaiguan Shipbuilding Industry will construct the bulkers and is scheduled to deliver them between 2024 and 2025.
Citic FL was launched in 2015 but is a newcomer to shipping. It hired Guo from ICBC Financial Leasing in April last year to lead its shipping portfolio.
According to IHS Markit, Citic FL bought its first ship, a secondhand supramax bulker — the 56,970-dwt Xin Zhi Yuan 1 (built 2010) — from Shenzhen Ocean Shipping in December for $19m.
