[270313.EN.SEA] CIMC Aims To Broker Deal In Dalian For Twenty 8,800-TEU Ships for MSC

SOUTH Korean shipyards are overtaking Chinese yards in gaining orders for containerships over 10,000 TEU due to space availability, according to London's Containerisation International.

But if China's leading container manufacturer, China International Marine Containers (CIMC), can broker a deal for twenty 8,800-TEUers for Geneva-based Mediterranean Shipping Company, then Dalian Shipbuilding Industry Co (DSIC) is in line for the order.

According to its parent company Shanghai-listed China Shipbuilding Industry Co Ltd, DSIC is a "primary partner" for orders of postpanamax ships.

The deal echoes September's contract between CIMC, DSIC, and STX Dalian from French carrier CMA CGM for 10 newbuildings of 9,200 TEU over a 12-year period, though four orders went to South Korea's STX due to Dalian space constraints.

The deal was a first for CIMC in shipleasing and innovative in its ability to jump regulatory hurdles to support CMA CGM's fleet renewal. To do so it set up individual shipowning vehicles in Hong Kong where the company recently floated shares on the bourse.

It is unknown whether DSIC has dock capacity for an order of 20 from CMA CGM but it will make it a first buy for the carrier in China, said CIMC, cited a report from London's Containerisation International.

Further Chinese yards in discussion over vessel orders include China State Shipbuilding Corp subsidiaries, Hudong Zhonghua and Jiangnan Shipyard (Group) Co. Yangzijiang Shipbuilding declined to price due to low figures.

Recent deals for Hudong Zhonghua include a CSCL transaction for box ships of 10,000 TEU and one of 8,888 TEU for Hong Kong's OOCL. Jiangan Shipyard has won Costamare Shipping and Schulte Group orders for six vessels of 8,949 TEU and Danaos Shipping's recent delivery of five 8,533 TEU.

There are yards yet to win big ship orders, which include Beihai Shipbuilding Industry Co in Qingdao and Bohai Shipbuilding Industry Co in Huludao, Liaoning, both CSCL units and ultimately controlled by China Shipbuilding Industry Corp in Beijing.

But with prices of the recent MSC deals at US$82.4 million a piece, above break-even but on the edge of profitability, the rush for yards to get their order books full is slowing against strengthening Chinese yuan and rising costs of labour and steel plates.

According to one source, "the current newbuilding price has been at a point that cannot be any lower."

CIMC, jointly controlled by China Merchants Group and Cosco Group, deals with manufacture and sale of transportation equipment, such as containers, road transport vehicles and airport ground-handling equipment.

Source : HKSG.