24 vessels! Two Chinese shipyards to share the order! Shipping giant places first order for methanol-powered ships

German shipping giant Hapag-Lloyd is accelerating its fleet's green upgrade by entering the methanol-powered vessel sector for the first time, investing 10 billion yuan to order 24 new ships from two Chinese shipyards.

According to TradeWinds, Hapag-Lloyd has signed letters of intent with two domestic shipbuilders to order a total of 24 methanol dual-fuel feeder container vessels ranging from 3,500 TEU to 4,500 TEU. Of these, Hapag-Lloyd will order 8+6 4,500 TEU vessels from CIMC Raffles in Yantai, while an additional 6+4 3,500 TEU vessels will be built by Sanfu Shipbuilding in Taizhou.

The 4,500 TEU vessels from CIMC Raffles are projected to cost approximately $70 million per ship, while the 3,500 TEU vessels from Sanfu Shipbuilding are estimated at around $60 million each. Upon full confirmation of the option orders, the total value of the 24 newbuildings will reach $1.58 billion (approximately RMB 11.249 billion).

For reference, Clarkson data indicates that the current newbuilding price for a 3,700-4,500 TEU conventional fuel container ship is approximately $60.5 million, a slight increase from $60 million during the same period last year.

The Hapag-Lloyd order represents a breakthrough for both shipyards. If finalized, this would mark CIMC Raffles' first foray into container ship construction. According to Clarkson data, CIMC Raffles has never built container ships before. Its current order book of 12 vessels includes 5 car carriers, 3 roll-on/roll-off ships, 4 floating production, storage, and offloading units (FPSOs), and 1 rock-dumping vessel.

It is understood that CIMC Raffles traces its origins to the Yantai Shipyard established in 1977, which delivered China's first bottom-sitting drilling platform in 1978. Over the years, the shipyard has delivered over a hundred marine equipment units of various types. Its current business spans offshore oil and gas, marine fisheries, marine clean energy, special-purpose vessels, marine space utilization, and asset operation management.

Additionally, the order from Hapag-Lloyd will mark Sanfu Shipbuilding's first methanol dual-fuel container ship construction project. According to Clarkson data, Sanfu Shipbuilding's current dual-fuel container ship orders consist solely of seven 3,716 TEU dual-fuel LNG-powered vessels ordered by German shipowner Hartmann Schiffahrts. Five of these vessels have already been delivered and are in operation, with the remaining two scheduled for delivery this year and next. However, last year Sanfu Shipbuilding secured orders for two rock-dumping vessels from CSL OWL, both of which will utilize methanol dual-fuel propulsion.

Notably, these orders from both shipyards also mark Hapag-Lloyd's first investment in methanol dual-fuel vessels. Previously, all dual-fuel ships in Hapag-Lloyd's owned fleet were LNG-powered. Last year, the company re-entered the newbuilding market by placing a large order for 24 LNG dual-fuel container ships with two Chinese private shipbuilders, further solidifying its commitment to LNG fuel.

Hapag-Lloyd's order for 24 LNG dual-fuel vessels last year includes 12 16,800 TEU container ships and 12 9,200 TEU container ships from New Era Shipbuilding. These newbuildings will be delivered between 2027 and 2029, representing a total investment of approximately $4 billion. This marks one of the largest newbuilding investments in Hapag-Lloyd's history.

Earlier this year, reports indicated that Hapag-Lloyd planned to order 12,500 TEU and 16,000 TEU container ships, wavering between Chinese and South Korean shipyards. However, when the U.S. Trade Representative's Office (USTR) proposed Section 301 tariffs on Chinese shipyards, the price gap between Chinese and South Korean shipbuilders widened. Hapag-Lloyd ultimately abandoned this shipbuilding plan.

Shipbrokers indicate that Hapag-Lloyd's shift in focus from large vessels to medium and small-sized ships is unsurprising. With a severely aging fleet and significant growth in demand for feeder routes, global demand for newbuild feeder and medium-sized container vessels is currently robust. Clarksons data reveals that new orders for container ships in the first nine months of this year reached 413 vessels totaling 3.3 million TEU—more than double the average over the past decade and just 7% below the record-breaking pace set in 2024. Notably, orders for feeder vessels of 5,000 TEU and below surged to over twice the level seen in the same period last year, with the vast majority of these new orders secured by Chinese shipyards.

Despite this surge in new orders, the current order backlog for feeder vessels remains relatively low. Clarkson data indicates that vessels under 3,000 TEU account for only 8.11% of the existing fleet, while those at 8,000 TEU and above represent a substantial 46.60% of the order backlog.

Constantin Baack, CEO of Norwegian container ship owner MPC Container Ships (MPCC), noted that order volumes for small and medium-sized container vessels remain insufficient. Considering that 58% of existing vessels under 6,000 TEU are over 15 years old, investing in feeder and medium-sized container ships remains a key market opportunity.