Author Topic: CMA CGM in preliminary talks for boxship orders  (Read 2109 times)

Offline Hannes van Rijn

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CMA CGM in preliminary talks for boxship orders
« on: February 23, 2016, 04:28:53 AM »
South Korea's Big Three shipbuilders have confirmed to IHS Fairplay that they are in preliminary talks with French liner operator CMA CGM, which is looking to order another set of ultra-large container ships (ULCSs).

Sources from Hyundai Heavy Industries (HHI), Samsung Heavy Industries (SHI) and Daewoo Shipbuilding & Marine Engineering (DSME) said that CMA CGM are to build 20,000 teu container ships. However, the French line has yet to decide on the number of vessels it wants. It is also not known if CMA CGM will order the vessels directly, or through a tonnage provider. The company has previously ordered newbuildings through Bank of Communications Leasing and Minsheng Leasing, both Chinese leasing companies.

A spokesman for DSME said, "CMA CGM has been in discussions with us about the container ships. But we don't know how many ships CMA CGM will order, or the price, at this point. We think that DSME is not the only shipyard in discussions with CMA CGM for this order."

Sources from HHI and SHI would only say that they have been approached by CMA CGM.

The French line, which is planning to acquire Singapore's Neptune Orient Lines (NOL), is likely to execute the order once it completes the takeover, estimated to cost USD2.4 billion. The takeover of NOL, Southeast Asia's largest container shipping firm, would enlarge the scale of CMA CGM, which is currently the world's third largest shipping line.

NOL's majority shareholder, the Singapore government's investment agency Temasek Holdings, had been looking to offload the shipping firm, which had been losing money from 2011 to 2014.

After liner operators went into a ULCS building frenzy from 2011 to 2014, such orders more or less evaporated in 2015 as container freight rates nosedived and have continued to trend lower this year.

A ship broker commented, "This is likely to put pressure on newbuilding prices and the South Korean yards are hungry for orders, especially when drillship and LNG carrier orders have also dried up."

This ship broker believes that CMA CGM, led by Jaques Saade, would aim for a price of not more than USD160 million per vessel.

CMA CGM is also in talks with some Chinese shipbuilders to build some 2,600 teu feeder vessels. The French line owns Taiwanese intra-Asia carrier Cheng Lie Navigation.

Maersk Line was the last company to order ULCS in South Korea, when it contracted 11 19,630 teu ships for USD1.8 billion from DSME in June 2015.

Source IHS


 

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