Cosco Shipping Bulk is going on an $880m shopping spree at Chinese shipyards, placing orders for 16 firm newcastlemaxes and securing options for up to 30 bulkers in all.
Industry sources told TradeWinds the Guangzhou-based dry bulk company — a unit of state-run giant China Cosco Shipping — has selected five Chinese shipyards for “the first tranche” of 210,000-dwt vessels that will be used to transport bauxite from Guinea to China.
Cosco Bulk is said to be awarding three vessels each to Qingdao Beihai Shipbuilding Heavy Industry and Tianjin Xingang Shipbuilding Heavy Industry, which are both controlled by China Shipbuilding Industry Co (CSIC).
10-ship split
The remaining 10 ships will be split between Cosco Shipping Heavy Industry’s Yangzhou shipyard (formerly known as CIC Jiangsu) and Cosco joint-venture yards Nantong Cosco KHI Ship Engineering (Nacks) and Dalian Cosco KHI Ship Engineering (Dacks).
2016 Year the Guangzhou-based, dry bulk specialist, affiliated to state-run giant China Cosco Shipping, was launched
No1 Ranking in world dry bulk market by capacity
16,000 Total number of employees
11,400 Number of skilled seafarers, including 6,000 captains
Other interests Shipping support industry, real estate, property management, equipment manufacturing and hotels and tourism
The exact number of vessels each of these yards will build is not known.
Shipbuilding sources said Cosco Bulk has already inked letters of intent for the first round of the newcastlemaxes.
“The signing of the official newbuilding contract will be taking place after Chinese New Year,” said one shipbuilding source.
Scrubber fitted
The source said the ships will be constructed to IMO Tier II emissions standards and will be fitted with scrubbers.
Cosco Bulk is expected to be paying about $55m each for the newbuildings, which are slated to be delivered from the first half of 2021.
News of Cosco Bulk planning the order was first reported in TradeWinds in October.
The shipping giant needs the vessels to fulfil a contract with state-controlled Aluminum Corp of China (Chalco).
Chalco, which is listed on both the Hong Kong and New York stock exchanges, is the world’s second-largest alumina producer and China's largest producer of both alumina and aluminium.
Bauxite scheme
The Beijing-based company is investing up to $706m in the Boffa bauxite project in Guinea in an effort to secure a long-term, high-quality supply of the commodity.
Cosco Bulk is China’s largest bulker company and controls more than 400 vessels, with a total carrying capacity of more than 36.5 million dwt. Its fleet includes 28 VLOCs, 47 capesizes, 102 panamax bulkers and 223 handysizes.
