Chinese shipyards are promising! The newly crowned "shipping magnate" is following suit in shipbuilding.

2023-06-14 09:00

After becoming the world's first container shipping company whose fleet size exceeded 5 million TEU, the newly crowned "shipping magnate" Mediterranean Shipping Company (MSC) still has no intention of giving up its shipbuilding plans. Meanwhile, methanol fuel is becoming the preferred choice for an increasing number of container shipping companies when ordering new vessels.

According to a recent report released by Maersk Broker, Mediterranean Shipping Company (MSC) has approached leading shipyards in China and South Korea, hoping to order a series of dual-fuel 8000 TEU container ships, which may use LNG or methanol as fuel.

Clarkson's data shows that Mediterranean Shipping Company (MSC) currently has orders for 10 LNG-powered ammonia-ready 8100 TEU container ships with New Times Shipbuilding, and 6 LNG-powered 7900 TEU container ships with Hyundai Heavy Industries in South Korea. All these new vessels were ordered in April last year and are scheduled for delivery in 2025.

In addition, Yangzijiang Shipbuilding, Hyundai Samho Heavy Industries in South Korea, and Daehan Shipbuilding are currently building 8000 TEU class container ships. Furthermore, several Chinese and South Korean shipyards have recently received orders for dual-fuel container ships of similar specifications, including: HJ Heavy Industries in South Korea, which secured an order for 2 x 9000 TEU methanol-powered container ships from HMM (formerly Hyundai Merchant Marine) earlier this year. Zhoushan Changhong International received an order from Mediterranean Shipping Company (MSC) for 10 x LNG-powered ammonia-ready 11500 TEU container ships in December last year. Korea K Shipbuilding had signed a contract with Seaspan, the world's largest independent containership owner, for the construction of 4 x 7700 TEU class LNG dual-fuel container ships in the first half of last year, but Seaspan later decided to cancel the order.

Mediterranean Shipping Company (MSC) first circulated news in October last year about ordering a new batch of 8000 TEU container ships. At the time, Alphaliner reported that MSC was negotiating with several Asian shipyards for the construction of an "undisclosed number" of 8000 TEU dual-fuel LNG-powered container ships, estimated to cost around US$120 million per vessel.

Six months later, Mediterranean Shipping Company (MSC) has also included methanol fuel as one of its alternative fuel options. If MSC decides to choose methanol dual-fuel for its new vessels, it means that all of the world's top four container shipping giants have now joined the methanol fuel camp.

Starting with Maersk's first order for methanol-powered container ships in 2021, methanol fuel has now surpassed LNG to become the "preferred choice" for shipping companies when ordering vessels.

Clarkson's statistics show that a total of 37 new container ship orders were placed in the first quarter of this year, with as many as 21 of them being methanol-powered vessels. Among the total 392,500 TEU container ship orders in the first quarter, methanol-powered vessels accounted for 237,000 TEU, representing over 60%. In contrast, out of a total of 158 new container ship orders in the first quarter of 2022, only Maersk ordered 4 x 16,000 TEU methanol-powered vessels.

At the recent 2023 Global Summit on LNG and Future Fuels held in Amsterdam, Martin Wold, Principal Consultant for DNV Maritime Advisory, stated that new orders for methanol-powered vessels will be comparable to those for LNG-powered vessels this year. Martin Wold said that the rapid growth in methanol-powered new ship orders "appeared suddenly," and the current total number of methanol-powered new ship orders stands at 115.

As of now, among the world's top ten container shipping giants, five have ordered methanol-powered vessels, including Maersk (ranked second), CMA CGM (ranked third), COSCO Shipping Group (ranked fourth), and HMM (ranked eighth).

In addition, earlier this year, there were market reports that Germany's Hapag-Lloyd, ranked fifth, recently heard rumors of ordering 6 x 4000 TEU methanol-powered vessels. Furthermore, Evergreen Marine, ranked sixth, has reportedly issued tender invitations to shipyards in China, Japan, and South Korea, planning to invest US$4 billion to build 24 x 16000 TEU methanol-powered container ships.

Meanwhile, Maersk and CMA CGM are also reportedly preparing for a new round of large orders for methanol-powered container ships. Specifically, Maersk has signed a Letter of Intent with Yangzijiang Shipbuilding for the construction of 8+4 x 8000 TEU methanol-fueled container ships; CMA CGM plans to order 5-10 x 24000 TEU methanol-powered vessels and has approached major Chinese and South Korean shipyards for this purpose.

Mediterranean Shipping Company (MSC) has been the fastest-growing company in terms of fleet expansion during the supercycle of the past three years. Through extensive acquisitions of second-hand vessels and ordering new ships, MSC surpassed Maersk in early 2022 to become the world's largest container shipping company. More recently, MSC has become the first container shipping company globally to exceed the 5 million TEU capacity mark, having doubled its fleet size in just eight and a half years.

In comparison, Mediterranean Shipping Company's (MSC) 5 million TEU capacity is roughly equivalent to the total capacity of the global container ship fleet at the turn of the century.

Alphaliner's data shows that Mediterranean Shipping Company's (MSC) current fleet operates 758 vessels, comprising 464 owned ships and 294 chartered-in ships, with a total capacity reaching 5.0463 million TEU, holding an 18.7% market share. In comparison, Maersk, ranked second, has a fleet capacity totaling 4.1272 million TEU, with a market share of 15.3%.

In addition, Mediterranean Shipping Company (MSC) also has 123 new vessels under construction, totaling approximately 1.581 million TEU, which is equivalent to 31.3% of its existing fleet capacity. Alphaliner estimates that within a year, MSC's capacity will further surpass the 6 million TEU mark by mid-2024, although the exact timing depends on vessel purchases and sales.

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