China’s Shandong Shipping plans to order a series of newcastlemax bulker newbuildings worth close to $220m at state-owned Qingdao Beihai Shipbuilding Industry.
According to industry sources, Shandong is in close discussions with the Chinese shipyard for up to four 210,000-dwt vessels for delivery in 2020 and 2021.
The deal is for two firm ships plus two options.
“Shandong is not ordering the vessels on speculations," a shipping source said. "It has charter contracts in mind for these newbuildings. We heard it is ordering the ships for Vale’s employment.”
Contract signing in 2019
Shipbuilding sources said Shandong and Qingdao Beihai have already finalised the technical specifications for the newcastlemaxes and they believe the signing of the contract may happen early next year.
They added that the newbuildings — estimated to cost around $55m apiece — will be scrubber-ready and built to the IMO's newer Tier III standards.
A Shandong official said he does not have details of the company's newbuildings activities, while Brazilian mining giant Vale has declined to comment on the charters.
If it is true that Vale is chartering the newbuildings, it would mean that 15 firm and optional newcastlemaxes backed by contracts with the Brazilian company in recent weeks.
Last week, South Korea’s Polaris Shipping, H-Line and Pan Ocean were reported to have inked a series of 210,000-dwt bulkers at China’s New Times Shipbuilding. The trio is ordering the newbuildings against five-year contracts of affreightment (COAs) from Vale.
Firm vessel signings
Polaris is linked to an order for two firm vessels plus two options, while H-Line will be signing up for three firm units and Pan Ocean is taking two ships. It is also possible that Polaris and H-Line may take over two newbuildings that compatriot owner Korea Line Corp offered and then withdrew from the Vale bidding.
These New Times newbuildings — costing about $54m each and slated for delivery from the second half of 2020 and in 2021 — will be scrubber-fitted and built to IMO Tier III specifications.
Last month, Shandong contracted Shanghai Waigaoqiao Shipbuilding to build 10 capesize bulkers for delivery in 2020 and 2021 at a reported price of between $52m and $55m each. The Chinese shipowner has ordered the scrubber-fitted IMO Tier III bulkers on the back of long-term charters from German energy powerhouse RWE.
The rate and length of the charter contracts have not been disclosed, but the ships will be transporting 150 million tonnes of coal for RWE during the charter period.
China's Bank of Communications Financial Leasing and Shandong Huachen Financial Leasing are financing the 10 Shandong newbuildings.
