4 vessels, 4.3 billion yuan! This new shipowner bucked the trend and ordered more large ships

Following its first order two years ago, China's shipping company, Boya International Shipping, has returned to Jiangnan Shipyard to order four more ultra-large container ships.

According to TradeWinds, Boya International Shipping has signed a letter of intent with Jiangnan Shipyard for the construction of 2+2 14,000 TEU new Panamax container ships. The new vessels will use traditional fuel and be equipped with desulfurization devices. The first two are expected to be delivered before the end of 2027, with each costing at least US$150 million. The total amount will reach US$600 million (approximately RMB 4.334 billion) after the confirmation of the optional orders.

For reference, Clarksons' data shows that the price of a new 13,000/13,500 TEU container ship using traditional fuel is currently around US$148.5 million, a 6% increase compared to US$142 million in the same period last year.

Boya International Shipping (BAL), a subsidiary of LeCang Group, mainly engages in international container shipping, ship operation, and container operation, and is a core business segment of the group. Currently, the company focuses on self-operated ocean routes to North America, South America, Europe, and Australia, supplemented by near-ocean routes to Japan, South Korea, Taiwan, and Southeast Asia. Its parent company, LeCang Logistics, is a leading private cross-border maritime logistics service provider in China, successfully listed on the Hong Kong Stock Exchange on September 25, 2023.

Boya International Shipping entered the transpacific and Asia-Europe shipping markets in 2021, opening a China-US West Coast route in May of the same year and chartering multiple container ships at record rental levels. In June 2022, the company joined the shipbuilding industry, signing a contract with Jiangnan Shipyard for the construction of two 14,000 TEU container ships, the first 10,000-TEU ships in its fleet.

It is reported that Boya International Shipping's batch of 14,000 TEU container ships are among Jiangnan Shipyard's main products, a new type of highly efficient, green, and energy-saving ultra-large container ship independently researched and designed by the Jiangnan Research Institute. The first ship, H2789, officially started construction in March this year.

This project marks the first cooperation between Jiangnan Shipyard and Boya International Shipping. It is worth mentioning that Boya International Shipping's first order coincided with the end of the shipping boom, with spot freight rates for container ships falling from their peak. As a "newcomer" on the transpacific route at the time, the company's counter-cyclical order for ultra-large vessels attracted market attention.

This year's latest order from Boya International Shipping also comes at a time when the newbuilding market for container ships is cooling down, ending the "order boom" of the past three years. Clarksons' data shows that in the first four months of this year, only 29 container ship orders were placed, far lower than the 79 in the same period last year, while the order volume in 2021 and 2022 exceeded 200 in the same period.

All 29 container ship orders this year were placed with Chinese shipbuilders. In addition, among this year's new orders, only ONE (Ocean Network Express) ordered 6 13,000 TEU methanol dual-fuel container ships each from Yangzijiang Shipbuilding and Jiangnan Shipyard in January. The remaining 17 ships are medium and small-sized vessels from medium and small-sized shipping companies.

However, sources say that the container ship sector may see another wave of large container ship orders in the coming months, totaling up to 50 vessels worth more than US$7.5 billion (approximately RMB 54.177 billion). In addition to Boya International Shipping, several shipping companies, including COSCO SHIPPING Group, CMA CGM, ONE, and Evergreen Marine, are preparing to order new ships.

COSCO SHIPPING Group is reportedly planning to order 10 11,000 TEU container ships from Hudong-Zhonghua Shipbuilding and 12 14,000 TEU vessels from Yangzhou COSCO Shipping Heavy Industry. COSCO SHIPPING Group is considering methanol dual-fuel for the new ships, with each 11,000 TEU ship costing US$160-170 million and the 14,000 TEU ships costing US$200 million.

Meanwhile, CMA CGM plans to order up to 12 14,000 TEU container ships, as well as an "undetermined number" of 4,000 TEU and 8,000 TEU vessels. CMA CGM's newbuilding inquiries are still in the early stages, and the company has not yet decided whether to equip the new ships with LNG dual-fuel or methanol dual-fuel propulsion systems.

Earlier reports indicated that Evergreen Marine signed a letter of intent with Hudong-Zhonghua Shipbuilding to order 2+2 14,000 TEU and 2+2 8,000 TEU container ships. If this order is finalized, it will be the largest vessel in Evergreen Marine's fleet and the company's first order for 10,000 TEU ships in its more than 20 years of operation.