Southeast Shipbuilding wins order for four chemical tankers worth 900 million yuan from Intercontinental Shipping.

2024-02-23 09:00

On February 18, Intercontinental Shipping announced that its indirectly wholly-owned subsidiary, Seacon Shipping, had signed a contract with Fujian Southeast Shipbuilding for the construction of four 18,500-deadweight-ton product oil/chemical tankers.

These four new vessels are expected to be delivered successively between the second half of 2025 and the first half of 2026. Each vessel is priced at approximately US\$32.3 million, with a total transaction value of approximately US\$129.2 million (approximately RMB 930 million).

Intercontinental Shipping stated that the acquisition of vessels under the shipbuilding contract is in line with the group's strategy of gradually phasing out its older controlled vessels and replacing them with newer ones, expanding the group's controlled fleet, and continuously optimizing its fleet.

The company pointed out that the ongoing conflict and unrest in oil-producing countries in the Middle East since October 2023 have led to increased demand for oil transportation. The significant rise in the Baltic Dirty Tanker Index since the third quarter of 2023 reflects this surge in demand. In addition, the company's management believes that market conditions supporting the demand for chemical products will improve, thereby driving demand for global chemical product logistics services. By increasing the number of product oil/chemical tankers, the group's transportation capacity for oil and chemical products will increase, allowing the company to better meet market demand for its oil or chemical product shipping services, generate additional revenue, and create greater value and returns for shareholders. The board believes that by acquiring vessels, the group will be able to enhance its competitiveness in the shipping industry and meet market demand for its shipping services.

Furthermore, compared to several existing product oil/chemical tankers that Intercontinental Shipping is phasing out, these new vessels are more fuel-efficient and operationally more efficient, complying with the latest environmental regulations and current standards recently promulgated by the shipping industry.

It is understood that Intercontinental Shipping, established in 2012, is a comprehensive shipping service provider committed to providing customers with a comprehensive one-stop shipping solution across the maritime industry value chain. According to a Frost & Sullivan report, Intercontinental Shipping ranked first among ship management service providers headquartered in China in terms of the number of third-party owned vessels managed in 2021. With a total controlled fleet capacity of approximately 1.26 million deadweight tons and international route capacity of 1.15 million deadweight tons of dry bulk carriers, we are the fifth largest shipping service company and the fifth largest dry bulk shipping company headquartered in China.

As of June 30, 2023, Intercontinental Shipping controlled a fleet of 24 vessels with a total deadweight tonnage of approximately 1.32 million tons. At the same time, the number of vessels for which third-party management services are provided is 196, covering dry bulk carriers, tankers, chemical tankers, passenger ships, general cargo ships, and container ships.

For Southeast Shipbuilding, Intercontinental Shipping's order is its first newbuilding order this year. According to Clarkson data, excluding the latest order, Southeast Shipbuilding currently has a total order backlog of 27 vessels with 463,420 deadweight tons, including 11 container ships, 6 chemical tankers, 4 bulk carriers, and 6 offshore support vessels. Delivery is scheduled until 2026.

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