Two Chinese shipyards are set to share capesize bulker orders worth around $750m that are backed by charters with German electricity powerhouse RWE.
China State Shipbuilding Corp-controlled Shanghai Waigaoqiao Shipbuilding (SWS) has won the lion’s share of orders for up to 14 newbuildings of 180,000 dwt, according to shipbuilding sources.
China Shipbuilding Industry Co’s Qingdao Beihai Shipbuilding Heavy Industry will construct the remainder.
Chinese shipowner Shandong Shipping Corp is behind the SWS order, booking five firm vessels and five options on the back of RWE charters. TradeWinds reported earlier this month that Shandong was in talks with Chinese yards for up to 10 ships.
Meanwhile at Qingdao Beihai, four similar size vessels will be placed by the yard’s sister company, CSIC Leasing, also backed with charters from RWE. The deal does not include options.
Shipbuilding sources said contracts will be signed by early next month. They added that the Qingdao Beihai-constructed newbuildings will meet IMO Tier-II emissions standards, while the SWS vessels will comply with Tier-III regulations. All of the ships will be scrubber-ready.
How much Shandong and CSIC Leasing are paying for the newbuildings has not been disclosed.
One shipbuilding broker said reputable Chinese shipyards are currently quoting a price between $53m and $54m for a Tier-III capesize bulker newbuilding. Tier-II ships are said to cost $2m less.
SWS and Qingdao Beiahi are slated to deliver the ships from 2020.
Tough talks
As TradeWinds reported, RWE is said to have driven a hard bargain for the 10-year time charters, priced at index-related rates.
Shipbuilding sources said it had been seeking to charter the series of capesize bulkers for some time.
“Shandong Shipping and RWE started to engage in newbuilding discussions with shipyards last year,” one shipbuilding source said.
“But no deal was done, as there was a gap between the price sought by the buyer and the yards.
He said there had been suggestions that Shandong and RWE could sell the newbuildings in an asset play if prices rise.
The SWS order will significantly expand Shandong’s capesize fleet, which currently comprises three Beihai-built vessels on the water.
However, the Qingdao-based owner controls 11 other bulkers, including four large ore carriers of 250,000 dwt to 262,000 dwt, four panamaxes and three supramaxes.
Shandong also has a presence in the gas and tanker segments, and controls a large fleet of kamsarmax bulkers through Singapore-based joint venture SDTR Marine.
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