Four South Korean shipowners are bidding in Vale’s ongoing tender for newcastlemax bulker newbuildings.
Korea Line, Polaris Shipping, Pan Ocean and H-Line Shipping are competing to provide long-term contracts of affreightment of five years, shipping market sources said.
A Seoul-based source said Vale has yet to specify the number of newcastlemax newbuildings it requires, leading the companies to offer between two and four vessels.
“We think Vale may fix four vessels initially," ,” the source said. "But the number of newbuildings it employs may exceed 10."
Shipbuilding sources explained the newcastlemaxes will cost more than $50m each, as the vessels will be built to the IMO's newer Tier III emissions standards and fitted with exhaust-gas scrubbers.
They added that the South Korean outfits have already approached Chinese shipyards such as Shanghai Waigaoqiao Shipbuilding and New Times Shipbuilding for the 210,000-dwt newbuildings.
Rio de Janeiro-based Vale is said to be seeking to take delivery of the newcastlemaxes during the first half of 2020.
“This is the problem: the delivery date is early and most shipyards do not have the berth slots,” the shipping source said.
“There is a possibility that the shipping companies may turn to [the] resale market for the vessels. But, there are not many ships on order that will be fitted with scrubbers.”
As TradeWinds reported last month, Vale’s tender for newcastlemaxes on long-term charter is its first ever. Previously, it has relied on 400,000-dwt Valemax VLOCs and 325,000-dwt Guaibamaxes.
But the five-year term is somewhat shorter than its deals for large ore carriers, which are typically tied up for two decades or more.
“Vale believes the charter rate for bulk carriers will be firm for the next five years, and it is looking to lock in the vessels now,” a shipping source in Asia said. “Newcastlemaxes are flexible to trade. They can go to China and other countries such as Malaysia.”
The four shipping companies are not new to business with Vale, as all took part in the mining giant’s 325,000-dwt ore carriers’ tender project last year.
Eric Martin contributed to this story.
