[250119.EN.SEA] CMA CGM and OOCL Linked to Orders of Ultra Large Container Vessels

FRENCH shipping giant CMA CGM and OOCL, now owned by Cosco, have been linked to this week's reports that they are planning to order large containerships.

Singapore's Splash247 quotes a weekly report from Braemar ACM shipbroking as saying CMA CGM is ordering ten 15,000-TEU ships from Hudong-Zhonghua and Shanghai Waigaoqiao Shipbuilding.

"Against the backdrop of a unremarkable start to the year on the chartering market, the first large orders of the year have come to light with CMA CGM ordering a total of ten 15,000-TEU split amongst two Chinese yards," the latest weekly container report from Braemar ACM Shipbroking states.

In addition, OOCL is reportedly close to ordering a series of the largest boxships ever built.

Broking sources suggest CMA CGM has managed to negotiate a price in the region of US$1.1 billion for the 10 ships.

Hudong-Zhonghua and Shanghai Waigaoqiao Shipbuilding, both part of China State Shipbuilding Corporation (CSSC), are being tipped as the winners of the huge order. The pair are already contracted to complete a series of 22,000 teu giant ships for the French liner.

CMA CGM officials declined to confirm the deal when contacted by Splash247.

A ten-ship order would suggest the ships are bound for the Asia-Mediterranean tradelane, observed Andy Lane from Singapore's CTI Consultancy. "15,000 TEU are excellent ships. They can be used on the transpacific, Asia-Med or Asia-Middle East," Mr Lane said.

Last week Drewry claimed major lines have sated their appetite for ultra large container vessels (ULCVs), with the UK consultants optimistically slashing its projected boxship order forecasts from 2020 onwards.

While he had yet to hear of the CMA CGM order, Martin Rowe, who heads up shipbroker Clarksons Platou's Hong Kong operations, told Splash247: "My initial reaction is here we go again. Last week we were treated to various pundits declaring that the newbuilding boom in ULCVs to be finally over. 

However, this week we learn OOCL are ordering six 23,000 TEU ULCVs, which will be the worlds' largest container vessels when delivered, and here now is CMA CGM apparently doing something similar.

"With one new ULCV delivering approximately every week in 2019 against a background of Trump trade wars and a slowing economy in Europe and elsewhere one can only assume that the experts within the liner companies are taking a rather long-term view of things in the expectation of a broader recovery further down the line."

Hua Joo Tan, an analyst at box watchers Alphaliner, on hearing the CMA CGM news, told Splash247: "So much for the end of the capacity race."

Source : HKSG.