COSCO Orders 24 Bulk Carriers in $1.27 Billion Expansion

COSCO Shipping Development has placed orders for 24 new dry bulk vessels valued at RMB8.66 billion ($1.27 billion), further expanding its ship leasing portfolio through long-term charter agreements within the COSCO group.

The Shanghai and Hong Kong-listed company said the vessels will be ordered by its indirect wholly owned subsidiary, Hainan COSCO Shipping Development Shipping, and constructed at shipyards operated by COSCO Shipping Heavy Industry and China State Shipbuilding Corporation (CSSC).

The newbuilding program includes 20 multi-purpose grain carriers with a deadweight of 87,000 tonnes and four 210,000 dwt Newcastlemax bulk carriers. Deliveries are scheduled to begin in the middle of 2029 and continue through the end of 2030.

Fifteen of the 87,000 dwt grain carriers will be built at COSCO Shipping Heavy Industry’s Dalian shipyard at a cost of RMB319 million per vessel, representing a total contract value of RMB4.79 billion. CSSC Chengxi Shipbuilding will construct the remaining five vessels of the same design at the same unit price.

The four larger Newcastlemax vessels will be divided between two CSSC shipyards. Dalian Shipbuilding Industry Corporation will build two of the 210,000 dwt ships for RMB528 million each, while Beihai Shipbuilding will construct the other two at RMB610 million apiece. These larger bulk carriers will be designed to be methanol-ready and ammonia-ready.

Once delivered, all 24 vessels will be chartered under long-term lease agreements to Huifeng, a subsidiary of COSCO Shipping Bulk. Each charter will have a duration of 240 months, with a flexibility of plus or minus 120 days from the delivery date. Huifeng will not be required to purchase the vessels when the lease agreements expire.

COSCO said the transaction also supports the development of the Hainan Free Trade Port by encouraging the broader use of the renminbi across shipbuilding, vessel leasing, and shipping activities.