COSCO ORDERS EIGHT MORE BOXSHIP BEHEMOTHS
THE containership newbuilding market has burst back into life with a massive $1.3bn order from Cosco Container Lines for eight 13,350 teu vessels.
The Chinese line, which already has eight 13,100 teu vessels in the pipeline through a long-term charter agreement with Seaspan, confirmed the new order late today after setting out its ambitious expansion programme a couple of weeks earlier.
The huge ships are to be built by Nantong Cosco KHI Shipping Engineering, known as Nacks, a joint venture between Cosco and Kawasaki Heavy Industries.
In a stock exchange filing, parent company China Cosco Holdings also said it had placed a separate order with Nacks for eight 205,000 dwt bulk carriers in a deal worth $612m.
Cosco Container Lines, a wholly-owned subsidiary of China Ocean Shipping (Group), said bank finance would cover approximately 80% of the cost, with the balance to be funded from internal resources. The same financing terms apply to the bulk carrier order.
Containership contracting had slowed down this year after an unprecedented investment spree last year as owners and operators signed up for ships in excess of 12,000 teu.
Latest estimates put the number of these super post-panamaxes now on order at 140. Mediterranean Shipping Co tops of the league with 39, followed by Maersk with 18 and CMA CGM with 17.
The price Cosco is paying of $166m per ship appears to be slightly on the low side.
Howe Robinson research director Paul Dowell said recently that prices for ships of this size were in the $175m to $187m range.
Seaspan paid a contract price of $165m for the 13,100 teu ships it ordered last September from Hyundai Heavy Industries that will be chartered to Cosco for 12 years at $55,000 a day.
Even before this order, Cosco Container Line was on a fast growth trajectory. A liner market share report published by AXSLiner last month showed that Cosco"s containership orderbook stood at 382,044 teu, equivalent to 89% of its existing fleet.
Having lost market share between 2000 and 2005, the Chinese line is now recovering fast and poised to climb into the world"s top five as it doubles fleet capacity over the next few years.
Financing constraints have hit the pace of containership contracting so far this year, although speculation that some of the big boxships already ordered could be cancelled because of the credit squeeze have been dismissed by experts.
The agreement between Cosco and Nacks was signed today, but had been signalled in an announcement in April.
Source: Janet Porter-Lloyds List