Chinese ships from Chinese shipyards for USD 123 billion. European Commission to Chinese school to learn economics

/in /by

By Marek Grzybowski

The Chinese order book for new ships has already exceeded USD 123 billion in 2024, of which container ships account for about 38% of all new contracts for merchant ships, Veson Nautical experts calculated based on VesselsValue data. However, tankers still dominate the docks of Chinese shipyards in terms of the number of units produced. In terms of value, container ships dominated. EU shipowners also contribute a considerable amount to the development of the Chinese shipbuilding industry. Passenger and specialist ships dominate EU shipyards.

Banchero Costa Research reported in January 2025 that the fleet of tankers with a deadweight of over 60 thousand tons currently consists of 2,194 units, with a total deadweight of 442.14 million tons. There are currently 884 VLCC units in operation, which is 40% of the total number of such ships. Suezmax tankers accounted for 596 units in January this year, or 27% of the total number of ships. There were 660 Aframax tankers in January, or 30%. The number of Panamax tankers was estimated at 54 ships.

Tankers on top
Delivers of oil tankers with a deadweight of over 60,000 tons reached the peak of contracts last in 2017 – experts remind. At that time, orders reached a total of 131 units with a deadweight of 26.44 million tons. In 2024, deliveries reached 16 units with a deadweight of 2.33 million tons – calculates Banchero Costa Research and forecasts: “We currently expect deliveries of around 40 units and 6.49 million dwt in 2025 after taking into account the delay in ship production”.

The market for oil tankers is dominated by shipowners from Greece, but operators from China are catching up. Veson Nautical recently summarized the Chinese order portfolio of the largest Chinese companies operating commercial ships and information on ships currently being built in Chinese shipyards. Among China’s largest ship orders last year, China Merchants Shipping ranked first with 28 new ships worth $4.4 billion. The investment was mostly in the tanker and LNG sectors, each accounting for about 33%, but also included new orders for bulk carriers and vehicle carriers.

 

In mid-year, the operator reported that China Merchants was ordering $1 billion worth of VLCCs and product tankers under contracts for 100 new vessels. The order book includes five VLCCs and five LR2 tankers. The orders placed with Chinese shipyard DSIC include five 306,000 dwt tankers and five 115,000 dwt Aframax vessels. The 333m long and 60m wide VLCC is the latest generation of VLCC tankers developed by DSIC. These are vessels designed to quickly navigate the Strait of Malacca.

The shipyard emphasizes that the Aframax is “tailor-made” for China Merchants Energy Shipping. The product tanker is 243m long and 44m wide and has been designed to be energy efficient. The 10 new tankers are expected to be delivered in 2027 and 2028. The shipowner emphasizes that this will be a “strong support for the international transportation of energy raw materials to China.” DSIC reports that it has “built 57 vessels for China Merchants Energy Shipping since 2007.”

COSCO focuses on container ships
COSCO Shipping Lines is in second place with a portfolio of contracts worth USD 3.06 billion. In mid-2024, COSCO contracted a series of container ships for USD 2.15 billion. The Chinese shipping giant has ordered the construction of new Post Panamax ships, of course at the Chinese shipyard group Cosco HI Yangzhou – informs Irene Ang from “Trade Winds”. Chinese shipbuilders will build a dozen container ships with a capacity of 13,400 to 14 thousand TEU at the subsidiary shipyard Cosco Shipping Heavy Industry Yangzhou (Cosco HI Yangzhou).

Cosco plans to install engines in four ships that will be able to switch on methanol power. Cosco Shipping Holding expects 95 percent profit increase in 2024. Chinese shipping giant Cosco Shipping Holding announced that it will achieve a record net profit of RMB 55.37 billion (USD 7.55 billion) in 2024.

Third in terms of order value is COSCO Shipping Development, which ordered 20 bulk carriers last year, from Ultramax to Kamsarmax, worth USD 929 million. COSCO SHIPPING Development announced in September last year that it had entered into a comprehensive investment, shipbuilding and leasing agreement for 42 bulk carriers. It is the largest shipbuilding and leasing transaction since the company transformed into a shipping and financial services operator in 2016.

 

The Chinese operator operates in the shipping and finance industry. It is actively developing its business in the shipping and logistics sector. COSCO Shipping Development manages a fleet of over 140 vessels. Its maritime transport services portfolio covers various business segments, including container ships, bulk carriers and multi-purpose pulp carriers. The shipowner emphasizes that “This transaction will significantly increase the scale of the company’s ship assets and strengthen the foundation of its efforts to integrate the industry and finance.”

Chinese ships from Chinese shipyards
According to the terms of the agreement, COSCO Shipping Development will commission subsidiaries of COSCO Shipping Heavy Industry to build 20 bulk carriers, and CSSC Chengxi Shipyard will execute contracts for additional orders for 22 bulk carriers. The fleet will consist of five 64,000 dwt ships, two 82,000 dwt ships and thirty-five 80,000 dwt ships. The total value of all contracts is estimated to reach more than RMB 14.3 billion. The ships will be launched in 2026 and 2027. The ships will be chartered for the long term COSCO SHIPPING Bulk.

COSCO Shipping Bulk, which has recently seen its stock value rise, ranks fourth in the contracts rankings, according to Veson Nautical, having ordered 10 new ships for USD 822 million, including eight Newcastlemax and two coal ore carriers, which are to be delivered between 2026 and 2028. The operator announced in December last year that it plans to expand its fleet with a series of 18 new bulk carriers. The contracts were signed within two consecutive days. On December 19, 2024, a contract was signed for 10 Kamsarmax bulk carriers (82,000 dwt).

COSCO Shipping Bulk has signed a partnership agreement with Everbright Financial Leasing and Jiangsu Hantong Ship Heavy Industry Co., Ltd. to build 10 Kamsarmax vessels. The vessels are under operating lease agreements with Everbright. COSCO Shipping Bulk management emphasized that “This cooperation highlights the synergy of expertise in shipping operations, financial services and shipbuilding, contributing to the high-quality development of the shipping industry.”

On December 20, 2024, a contract was signed for the construction of 8 Newcastlemax bulk carriers (210,000 dwt). This COSCO Shipping Bulk agreement includes orders for 3 vessels + 5 optional orders for Newcastlemax bulk carriers, which will be built in Yangzhou COSCO Shipping Heavy Industry. The vessels will be equipped with Chinese-built engines, which can be retrofitted to also run on methanol and ammonia. The announcement emphasized that “these vessels reflect the company’s commitment to sustainable shipping and green innovation.”

The 18 vessels are expected to be delivered between 2027 and 2028. The shipowner emphasizes that “COSCO Shipping Bulk is committed to promoting sustainable maritime development and building a solid fleet ready for the future. With these new orders, COSCO Shipping Bulk is not only expanding its fleet, but also paving the way for greener, smarter and more efficient maritime transportation,” reports Chen Yang of “Xinde Marine News.”

Newbuilds – Tankers in Docks
According to Veson Nautical, new shipbuilding prices are at their highest since 2009 due to high steel prices, lack of shipyard availability and demand. The supply-demand imbalance caused by the Red Sea crisis has boosted sentiment and expectations for high profits. This has prompted owners to place orders for container ships, oil tankers and LNG carriers.

Tankers were the most popular type of ship ordered from Chinese shipyards in 2024. Last year, 526 new ships were ordered worth $27.4 billion. Throughout 2024, new oil tanker construction prices were at their highest since 2009 due to high steel prices, lack of shipyard availability and high demand for these vessels related to sanctions imposed on the transportation of Russian oil.

– The supply-demand imbalance caused by the Red Sea crisis has boosted sentiment and expectations for high profits. This has prompted owners to place orders in key sectors such as tankers, bulk carriers and container ships, Vesson Nautical analysts said.

The second largest order book was bulk carriers, with 430 new ships ordered, worth $17.7 billion. The third largest number of ships was taken by the container ship sector, with 298 new contracts. However, the value of these orders ($46 billion) significantly exceeds the value of any other sector. “This is due to the fact that values ​​for this sector have seen significant growth over the past year in all subsectors and size ranges,” explains the Nautical expert. However, the value of new container ship orders grew the slowest last year. For example, the value of new Post Panamax projects with a capacity of 7,000 TEU increased by 14.45% from $101.99 million to $116.73 million.

China now controls 65% of the global shipbuilding order book. The US commercial shipbuilding sector has fallen to less than five ships per year, compared to 70 in 1975, while China is currently building 1,700 ships per year. Clarksons Research reports that “Global shipbuilding production increased by 13% in 2024, with the largest increase recorded by China (by 18% y/y). Orders from EU shipyards fell and their share remains at 4%. China has clearly dominated global shipbuilding for several years. The PRC is home to seven of the 10 largest shipyards.