Chinese state-backed firms have moved to both shore up local yards and further cement their hold on Brazil-China iron ore trades.
Three Chinese companies have ordered a total of thirty 400,000 dwt valemaxes for delivery from 2018. The 12m dwt of new tonnage will likely be deployed on Brazil-China trades. China Merchants has given four valemax orders each to Shanghai Waigaoaqiao Shipbuilding (SWS) and Behai Shipbuilding and another pair to CIC Jiangsu, while China Cosco Shipping Corporation has ordered 10 at SWS, and ICBC Leasing has given six contracts to Yangzijiang Shipbuilding and four to Behai.
The ships are priced at $85m each, a far cry from the $140m shelled out for the original series of valemaxes eight years ago.
To put the scale of these orders – 12m dwt – in perspective, combined they are larger than the entire dry bulk fleet of Japan’s Nippon Yusen Kaisha (NYK), the world’s third largest dry bulk owner in deadweight terms according to VesselsValue.com.
Commenting on the order, Martin Rowe, a broker with Clarkson Platou in Hong Kong, told Splash: “Believe it or not these vessels are actually needed.” Research from his company counts upwards of 50 VLOC conversion vessels (equating to 16m dwt) that have to be phased out on the Brazil-China ore trade by 2020. Many of these ex single hull VLCC to VLOC conversion vessels by time of phase-out will be pushing towards their thirtieth birthdays.
“It would be retrograde to replace those with standard 180 capes or even newcastlemaxes therefore despite first appearances this order make sense,” Rowe stated.