Caixin
Jul 16, 2021 03:38 AM
BUSINESS & TECH

Cosco Shipping Orders 10 Containerships for $1.5 Billion

What’s new: Chinese state-owned container carrier Cosco Shipping Holdings Co. Ltd. (601919.SH) placed a $1.5 billion order for 10 large containerships.

The ships will be built at affiliated shipyard, Cosco Shipping Heavy Industry (Yangzhou) Co. Ltd., another unit of state giant China Cosco Shipping Group, the company said Thursday in a statement.

The ships are to be delivered between December 2023 and September 2024, and the rest by the end of 2025, the company said. Cosco Shipping said it will pay for the ships in cash installments according to construction progress. At least 40% will be paid from its own funds and the rest from financing.

Cosco Shipping is the third-largest container carrier in the world, with a fleet of 498 container vessels and a capacity of 3 million twenty-foot equivalent units (TEUs).

The background: Shipping lines around the world are racing to build new ships amid a continuing boom in container shipping. Denmark’s AP Moller-Maersk, the world’s largest container shipper, is in talks with South Korea’s Hyundai Heavy Industries to build at least six and as many as 12 methanol-fueled 15,000 TEU container ships at an estimated cost of $2.18 billion, for delivery in 2025.

Taiwanese liner operator Evergreen Marine Corp. ordered a pair of 24,000 TEU ships in June from China State Shipbuilding Corp. after it commissioned 20 container ships from South Korea’s Samsung Heavy Industries in March.

With rapid growth, South Korea is likely to outpace China in terms of new shipbuilding orders, shipping services provider Clarksons PLC estimated in a report on the global shipping market. Fast-rising raw material costs have made Chinese shipbuilders less aggressive than their South Korean counterparts in seeking orders, according to a source from China State Shipbuilding Corp. Ltd.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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