Cosco is making a hefty addition of tonnage to the large multipurpose (MPP) carrier sector with a nearly $290m order for eight more ultramax ships.
The order will give Cosco Shipping Specialised Carriers a fleet of 20 purpose-built ships designed to exploit high-volume Chinese imports of wood pulp as a basis for backhaul export cargoes of Chinese industrial products.
Pulp carriers
The company bills the ships as MPP pulp carriers, although some reference sources classify them as bulkers.
The order brings Cosco group orders at its own yards to some $1.1bn, after majority-owned Orient Overseas Container Line said earlier that it would spend some $780m on building five 23,000-teu containerships at Dalian Cosco KHI Ship Engineering Co and Nantong Cosco KHI Ship Engineering Co.
Guangzhou-based Cosco Shipping Specialised said it will order the eight new ships from the Dalian yard of sister company Cosco Shipping Heavy Industry.
A 12-ship series has been underway at the same yard with some design modifications since 2017.
Four of the ships will trade under the Chinese flag and will be more expensive for tax reasons, at some CNY 268m ($38.6m) per ship. The other four Hong Kong-flag vessels come in at $33.7m.
That lines up closely with the announced price of $33.5m for ships in the series ordered in November 2018.
Like earlier ships in the series, the 62,000-dwt ships are suited to industrial export cargoes. The first three featured four 75-tonne cranes but a company source told TradeWinds the newer vessels will feature deck gear of ordinary capacity.
Long-term contract commitments carrying unitised wood pulp from Brazil and Finland for Chinese industrial importers will position the ships for Chinese industrial export cargoes.
The company source added that they will probably also be used for additional legs carrying such cargoes as soda ash and fertiliser from the Mediterranean to South America.
In a stock exchange announcement, Cosco Shipping Specialised Carriers emphasised its plans in the pulp sector rather than the trading flexibility of the ships.
The earliest ships in the series made their initial voyages carrying Chinese-manufactured windfarm components and railcars to Brazil before loading pulp cargoes there for the return trip.
"According to the company's research, in the next few years, the global paper and pulp industry will continue to grow as a whole, with North and South America as the main production areas and Asia as the main sales area," the company wrote.
"China is the country with the largest pulp consumption in the world and is heavily dependent on imports. In recent years, the company has seized the opportunity to actively develop the pulp transportation market, but the current size of the company's pulp fleet cannot meet the company's freight demand."
Cosco Shipping Specialised Carriers, the former Coscol or Cosco Shipping Ltd, has roots in general cargo shipping, as the direct successor of the original China Ocean Shipping Co that became Cosco.
Its fleet includes a range of ship types falling outside the company's main dry bulk, tanker and containership divisions, including asphalt carriers, semi-submersible heavylift ships, car carriers, handysize log carriers and MPPs.
In wood pulp transport it ranks itself among the world's three largest companies, with "close cooperative relationships with major pulp mills around the world" and multiple contracts of affreightment.
