Yangzijiang Shipbuilding has confirmed that MSC has ordered a dozen 16,000 TEU container ships.
The Singapore-listed Chinese ship builder said on 6 October that the LNG dual-fuelled ships, with a total contract value of US$2.16 billion, are among US$2.51 billion of new orders secured between August and early October 2022.
The vessels are expected to be delivered from late 2024 to mid-2025 and bring MSC’s current orderbook to 114 ships of over 1.56 million TEU. The largest liner operator now has an operating capacity of 4.5 million TEU.
Yangzijiang chairman Ren Letian said that the new orders bring its existing orderbook to US$10.27 billion, the highest in its history, and extend its revenue visibility to mid-2025.
Year-to-date, Yangzijiang has secured new orders for 40 vessels worth approximately US$3.6 billion, exceeding its 2022 target of US$2 billion.
Ren said, “The stricter environmental regulations in recent years have given rise to a growing demand for green vessels and we are poised to be a beneficiary of this growth.”
CIMB Securities analyst Lim Siew Khee noted that while the recent correction in container freight rates has begun discouraging ship owners from ordering more newbuildings, Yangzijiang is unlikely to be hit by order cancellations.
Clarksons data shows that in the first eight months of the year, boxship newbuilding orders decreased 78% year-on-year to 13 vessels, as average monthly freight rates slumped 31% year-on-year.
Lim said, “Large, financially-backed ship owners constitute most of the existing customers on Yangzijiang’s orderbook; and Yangzijiang now receives a 40% deposit prior to delivery (10% upon order confirmation, 30% milestone payments), versus 30% previously.”