On July 29, COSCO SHIPPING Development Co., Ltd. (hereinafter referred to as “COSCO Shipping Development”) issued several announcements disclosing its approval of a proposal by its wholly-owned subsidiary, COSCO SHIPPING Development (Hainan) Co., Ltd. (hereinafter referred to as “COSCO SHIPPING Development (Hainan)”), to order 10 bulk carriers with a deadweight tonnage of 210,000 tons, 4 asphalt carriers with a deadweight tonnage of 9,000 tons for long-term leasing.
Ten 210,000 DWT bulk carriers
According to an announcement, COSCO SHIPPING Development (Hainan) has commissioned Qingdao Beihai Shipbuilding, a subsidiary of China State Shipbuilding Corporation, to build four 210,000 DWT Newcastlemax bulk carriers. The price per vessel is RMB 528 million (excluding tax), for a total contract value of RMB 2.112 billion (approximately US$294 million). The first vessel is scheduled for delivery in December 2027, with the remaining vessels to be delivered by the end of August 2028.
At the same time, COSCO SHIPPING Development (Hainan) commissioned COSCO SHIPPING Heavy Industry Co., Ltd.’s Zhoushan subsidiary to build six 210,000 DWT Newcastlemax bulk carriers for a total contract price of RMB 3.168 billion (approximately US$442 million).
The total price of the 10 bulk carriers is RMB 5.28 billion (excluding tax, approximately US$736 million). With the approval of the COSCO SHIPPING Development (Hainan) Board of Directors, COSCO SHIPPING Development (Hainan) will time charter all 10 210,000 DWT bulk carriers to COSCO SHIPPING Bulk Co., Ltd. or its designated subsidiary upon delivery, and has signed relevant legal documents.
According to the vessel charter agreement to be signed by the two parties, the lease term for each vessel is 240 months ± 90 days from the date of delivery. In any event, the delivery date of each vessel will be no later than December 31, 2028. Upon expiration of the lease term, each vessel will be returned to COSCO SHIPPING Development (Hainan). Taking into account the dual-fuel engine upgrade, the expected annual charter rate for each vessel after delivery will not exceed approximately RMB 63.8 million (excluding tax, approximately US$8.8937 million).
Four 9,000 DWT asphalt carriers
The announcement disclosed that Hainan COSCO Shipping Development Navigation Co., Ltd., a wholly-owned subsidiary of COSCO SHIPPING Development, invested in the construction of two 9,000 DWT asphalt carriers for both domestic and foreign trade at Fujian Mawei Shipbuilding, with a single vessel cost of RMB 201.5 million (including tax, approximately US$28.09 million); and agreed that Oriental Fleet Bulk 09 Co., Ltd. and Oriental Fleet Bulk 10 Co., Ltd. would invest in the construction of two ice-strengthened 9,000 DWT asphalt carriers at CSSC Huangpu Wenchong Shipbuilding, with a single vessel cost of RMB 204.3 million (excluding tax, approximately US$28.50 million).
According to CSSC Huangpu Wenchong Shipbuilding, the shipyard has officially signed a contract to build two asphalt carriers in conjunction with China Shipbuilding Industry Trading Co., Ltd. and Hainan COSCO Shipping Development on July 29.
According to the news from CSSC Huangpu Wenchong Shipbuilding, the shipyard, together with China Shipbuilding Trading Co. Ltd (CSTC), formally signed a contract for the construction of two asphalt carriers with COSCO SHIPPING Development (Hainan) on July 29.
The four asphalt tankers, valued at over RMB 800 million yuan (approximately US$112 million), will be leased long-term to a subsidiary of COSCO SHIPPING Specialized Carriers Co., Ltd. upon delivery. According to the vessel lease agreement to be signed between the two parties, each vessel will be leased for approximately 15 years from the date of delivery. The daily charter rate for the combined domestic and international trade vessels is RMB 40,250 (including tax, approximately US$5,610.85), while the daily charter rate for the ice-strengthened vessels is RMB 40,250 (excluding tax, approximately US$5,610.85).
Sale and leaseback of one QC-Max LNG carrier
In addition to the 2 types of 14 new shipbuilding projects, according to the announcement, the Hong Kong single ship company under COSCO Shipping Development’s wholly-owned subsidiary Oriental Fleet International Co., Ltd. (hereinafter referred to as “Oriental Fleet International”) plans to carry out the sale and leaseback business of a 271,000 cubic meter QC-Max LNG carrier and sign relevant legal documents.
The purchase price of the target vessel in this sale and leaseback transaction will not exceed approximately US$360 million, and the sale and leaseback (bareback) term will be 20 years (240 months). The company will promptly fulfill its relevant information disclosure obligations upon the formal execution of the relevant sale and leaseback agreement.
COSCO SHIPPING Development stated that this transaction will help expand the scale and quality of the company’s ship assets, solidify the foundation of its ship leasing business, and enhance the company’s sustainable development momentum. By investing in high-quality, newer, environmentally friendly, well-configured, and highly versatile shipping capacity, COSCO SHIPPING Development demonstrates its support for global energy conservation, emission reduction, and sustainable development strategies, while also contributing to the transformation and upgrading of traditional industries.