Gianluigi Aponte’s MSC Mediterranean Shipping Company is said to have brought what was China’s biggest private shipbuilder back from the dead with a large container ship newbuilding deal, sending “shock waves” through the market and raising questions over its future.
Multiple shipbuilding sources have told TradeWinds that MSC has inked a contract with previously defunct Jiangsu Rongsheng Heavy Industries for up to a dozen LNG dual-fuelled 11,000-teu container ships.
The Jiangsu-based shipyard, which stopped contracting newbuildings a decade ago in the wake of the market crash, is said to have struck a deal involving eight firm vessels with options for an additional four ships.
Brokers said an LNG dual-fuelled boxship of this size would currently be priced in the region of $170m, which would bring the total to $2bn, but suggested that MSC’s contracts at Rongsheng are likely to be highly discounted.
Another said the contract was freshly minted this week and had sent “shock waves” through the Chinese shipbuilding market.
He said the deal raised questions over Jiangsu Rongsheng’s revival, such as who would issue refund guarantees for the shipyard, who was leading the operation, and where the shipyard was getting its finance and main engine supplies.
MSC did not respond to a request for comment on this story.
Shipbuilding sources said Chinese businessman Zhang Zhirong, the owner of Jiangsu Rongsheng, had been working to revive the shipyard for some time.
In 2022, he reportedly rehired former Rongsheng chief executive David Luan to restart the dormant company and rebrand it SPS Shipyard.
SPS was reported to have inked a letter of intent for four capesize bulk carriers and six kamsarmax ships with Greek shipowner George Economou’s Cardiff Marine for delivery starting in the third quarter of this year. However, it appears the deal did not materialise.
Brokers said Zhang, who does not reside in China, attended Posidonia in June.
He was said to have agreed on several provisional newbuilding contracts with Greek shipping companies, including Capital Maritime & Trading.
But refund guarantees are understood to have proved problematic to secure at that stage and, to date, there has been no news on those deals.
Brokers said representatives from the revived shipbuilder, which is said to be going under the name Jiangsu Xin Rong Shipyard or Jiangsu New Rong Shipyard, are on a marketing push in Europe and will be visiting the UK next week.
The original Jiangsu Rongsheng was established in 2006 during the shipbuilding market boom.
The shipyard was then the largest private shipbuilder in China with four dry docks and able to produce 5m dwt of vessels per year.
However, it stopped contracting newbuildings in 2014 following the global financial crash.
According to Clarksons’ Shipping Intelligence Network, Jiangsu Rongsheng delivered 94 ships between 2008 and 2017, of which 16 were VLOCs of 400,000 dwt.
Brokers said MSC has a huge appetite for container ship newbuildings.
The liner giant is said to have approached almost all shipyards in China capable of building the ship type and splashed out a total of $10.41bn on 52 LNG dual-fuelled newbuildings at five yards in China between June and September this year.
Brokers said Hengli Heavy Industries and Jiangsu Hantong Group were contracted to build 10 and 12 units of 21,000-teu boxships, respectively, while Zhoushan Changhong International Shipyard and state-owned Shanghai Waigaoqiao Shipbuilding are set to construct 19,000-teu vessels, with the former building 12 ships and the latter six.
Yantai-based Penglai Jinglu Shipyard, known for building midsize vessels, was contracted to build up to a dozen 11,500-teu newbuildings. The order marked the shipyard’s entry into the large boxship segment.
Clarksons’ SIN shows MSC has built up an orderbook of 119 newbuildings of which 109 are container ships, the rest being passenger vessels and cruise ships.
Aponte has been growing his fleet exponentially for the past few years and MSC now controls more than one-fifth of the world’s container ships, according to data from Alphaliner.
