China State Shipbuilding Corp (CSSC) — the world’s largest shipyard group — is set to sign CNY 30bn ($4.27bn)-worth of newbuilding contracts next week.

Shipbuilding players said several yards under the CSSC umbrella have lined up signing ceremonies during the first two days of the biennial Marintec China exhibition in Shanghai from 3 to 6 December.

A shipbuilding expert said China is taking advantage of the mega-merger this week of its huge southern and northern shipbuilding groups — CSSC and China Shipbuilding Industry Corp (CSIC) — to publicise domestic shipyard consolidation.

Displaying dominance

The merged entity under the CSSC banner will have 10% of the global orderbook, 310,000 workers and combined revenue of CNY 1trn.

“It [China] is out to show the world its dominance in the shipbuilding industry,” the expert said.

“Contracts for VLCCs, newcastlemax bulk carriers, gas ships and several other ship types will be signed. The over CNY 30bn orders will include letters of intent and option vessels.”

CSSC’s Shanghai Waigaoqiao Shipbuilding (SWS) is tipped to win the most deals. It is predicted to contract 21 newcastlemax bulkers and some aframax tankers.

The newcastlemax contracts “will involve some Chinese leasing houses and a few shipping companies”, the expert added.

China Development Bank Leasing (CDB Leasing), ICBC Leasing, Shandong Shipping, Star Bulk Carriers, Eastern Pacific Shipping and Pantheon Tankers have been named as making deals with SWS.

CDB Leasing is said to be signing up for two firm scrubber-fitted newcastlemaxes, plus two options, against long-term charters with German energy powerhouse RWE.

“Some shipping companies are booking dual-fuelled newcastlemax bulk carriers for BHP charter projects,” the shipbuilding expert said.

“The Australian mining company is said to be seeking to charter up to 14 LNG-fuelled newcastlemax bulk carriers, including options.”

VLCC orders

Dalian Shipbuilding Industry Co is set to land a series of VLCC newbuildings from China Merchants Energy Shipping, as well as dual-fuelled newcastlemax bulkers, while Hudong-Zhonghua Shipbuilding is poised to seal a 7,000-cbm LNG bunker newbuilding.

China’s oldest shipbuilding company, Jiangnan Shipyard, is expected to contract up to four ethane-fuelled very large ethane carriers of 98,000 cbm to 99,000 cbm, including options.

Newly formed Proman Stena Bulk and Eastern Pacific Shipping are believed to be ready to seal their newbuilding contracts with Guangzhou Shipyard International. The 50:50 joint venture between Stena Bulk and Proman Shipping is booking two methanol-ready 50,000-dwt tankers, while Eastern Pacific is ordering up to four LNG-fuelled suezmax tankers.

The $112bn union of CSSC and CSIC under the chairmanship of Lei Fanpei after 20 years as separate entities was announced in July and completed this week. It is part of Beijing’s strategy to merge state-owned entities within the same sector.

The combined CSSC controls more than half of China’s shipbuilding capacity, as well as multiple subsidiaries listed in Shanghai.

Lucy Hine contributed to this story

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