Mediterranean Shipping Co (MSC) is said to be boosting its orderbook with more neo-panamax container ships, even though the sector is softening and the global fleet is poised to grow by about 8% per year.
Shipbuilding sources said the cash-rich liner giant has struck a deal with Yangzijiang Shipbuilding for a dozen 16,000-teu, LNG dual-fuel newbuildings.
The contract — believed to be MSC’s fifth newbuilding deal in 2022 — is said to be worth $2.16bn.
The sources said the ships, which will cost slightly more than $180m each, will be delivered between the end of 2024 and 2026.
Yangzijiang officials declined to comment when contacted, citing contract confidentiality.
In an email, MSC said it had a healthy pipeline of newbuilding orders. “In keeping with MSC’s usual communications approach, we decline to comment on market speculation around specific orders,” it added.
Sources said the ships will be fitted with GTT’s Mark III Flex membrane-type containment system.
Sentiment towards the container ship market has turned negative and charter rates have softened.
London broker Clarksons reported that the container ship charter rate index was down 20% to 347 points from an April high, although it was still more than three times the level at the beginning of 2021.
Moody’s Investors Service is concerned about the boxship sector because of the high levels of newbuilding deliveries over the next two years.
It said the global fleet is poised to grow by about 8% annually — higher than market projections for demand growth of 2% to 3%. The imbalance will put negative pressure on freight rates and carrier profitability.
Shipping pundits believe MSC is reinvesting its profits, which would otherwise end up being taxed, and renewing its fleet with “green vessels” to reduce its carbon footprint.
Shipbuilding sources calculate that MSC has ordered a total of 42 LNG dual-fuel ships worth more than $6bn this year.
MSC has contracted Hyundai Heavy Industries to build six vessels at $134m apiece for delivery in 2025 and four 7,700-teu vessels at K Shipbuilding for $130m each to be delivered in 2024 and 2025.
In May, it ordered two newbuildings at China’s New Times Shipbuilding — one for 10 vessels of 8,000 teu, the other for 10 ships of 14,000 teu.
MSC is said to be paying New Times about $120m each for the smaller boxships and about $160m for the 14,000-teu units. It is scheduled to take delivery between the end of 2024 and the first quarter of 2026.
Yangzijiang is China’s largest privately owned shipyard. The MSC deal would be the yard’s fourth LNG dual-fuel container ship contract.
Its first was for a pair of 14,400-teu vessels placed by Hong Kong-based Tiger Group in 2020, which was followed by a deal for 15 vessels of 7,000 teu from Seaspan Corp. Singapore’s Pacific International Lines booked four 8,000-teu ships that feature GTT’s Mark III membrane system.
Yangzijiang has delivered Tiger’s vessels — the MSC Washington and MSC Virginia (both built 2022). They were installed with type-C LNG tanks.
Seaspan is slated to take delivery of the LNG dual-fuel 7,000-teu newbuildings between the fourth quarter of 2023 and late 2024. Yangzijiang will install type-B tanks on the boxships.
