CIMC orders five 8,800 teu ships for MSC

The Chinese container manufacturer China International Marine Containers (CIMC), through its wholly-owned subsidiary CIMC Finance Leasing Hong Kong, today placed firm orders for five compact wide-beam container ships of 8,800 teu at New Century Shipbuilding. All five orders were placed on the back of long-term charter contracts with the Mediterranean Shipping Company and are scheduled for delivery in 2015.

CIMC said that the ships were ordered for a total consideration of USD 425 million, which puts the price at USD 85 million per vessel and therewith roughly in line with recent orders for ships of comparable capacity.

MSC will charter the five newbuildings from delivery for periods of 17 years at a rate of USD 25,000 per day. At the end of their respective charters, MSC is obliged to acquire the ships at the predetermined rate of USD 21.50 million per vessel. While details of the charter have not been disclosed, the lease contracts are believed to be on bare boat terms, meaning that MSC will not only operate, but also manage the ships – unless the carrier chooses to outsource this task. Thus, the charters bear more resemblance to a purely financial dry lease, than to a classic time charter contract.

For CIMC, the five-ship deal marks the third series of container ship newbuildings which the group has ordered on the back of long-term charters to established blue chip carriers.

In September of 2012, the company had made its entry into ship owning and placed ten orders for 9,200 teu container ships for long-term leases to the French Line CMA CGM. Six of the ships were ordered at Dalian New Shipbuilding, whereas four contracts were awarded to STX Dalian. The deal with STX Dalian later failed, presumably due to difficulties on the side of the shipyard, which belongs to the financially troubled STX group of companies. CIMC later signed replacement orders at New Century Shipyard – one of the few capable yard that, despite the late start, was able to meet the delivery deadlines that CIMC had agreed with the charterer CMA CGM.

About one month ago, CIMC announced a similar deal with MSC and placed orders for seven 8,800 teu compact wide-beam ships at Dalian New Shipbuilding. Again, the ships would be ordered by CIMC, on the back of long-term leases to the shipping line.

With the most recent deal, CIMC now returns to New Century with an order for five more ships. All in, CIMC has now ordered a total of 22 compact wide beam ships for two major shipping lines: The company is to receive ten 9,200 teu ships for CMA CGM (six from Dalian New Shipbuilding and four from New Century Shipyard) and twelve ships for MSC (seven from Dalian New Shipbuilding and four from New Century Shipyard)

Both the 9,200 teu for CMA CGM and the 8,800 teu type for MSC are believed to be in-house designs developed by CIMC, as part of the container manufacturer’s efforts to broaden its portfolio.

The order is also noteworthy from MSC’s perspective. Just as the Mediterranean Shipping Company was by far the most active carrier when it came to the acquisition – either through ownership or charter – of 13,000 – 14,000 teu vessels, the Swiss-Italian carrier has now taken the lead in the field of compact wide-beam ships in the size class of around 9,000 teu.

Even if MSC was to stop ordering today, the carrier’s fleet of such ships would reach 36 units by late 2015. The carrier’s pipeline of the ‘type’ contains ships from Dalian Shipbuilding (CIMC), New Century Shipyard (CIMC), Sungdong (owned, possibly for sale and leaseback), Shanghai Jiangnan Shipyard (Schulte Gruop, BoComm, Costamare) and Shanghai Jiangnan Changxing Shipbuilding (BoComm).

The new breed of compact wide-beam ships, also ordered by carriers such as Evergreen, CMA CGM, CCNI or CSAV, is slowly turning out to be the future workhorse for large, but not ultra-large trades. With moderate drafts and usually around 1,000 reefer plugs, these vessels can be deployed with great flexibility.

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