China Merchants Energy Shipping (CMES) has placed a $728m order for six very large ore carriers (VLOCs), marking its first newbuilding of this vessel type in more than 10 years, according to Splash247 Maritime. The state-controlled, Shanghai-listed owner plans to deploy the 343,000 dwt ships under long-term contracts of affreightment with major commodity traders, signalling a strategic bet on sustained dry bulk demand.
Deal Details and Fleet Expansion
The order, valued at up to RMB4.93bn (approximately $728m), is structured as a related-party transaction with sister company China Merchants Shipbuilding Industry, which will build the six vessels at its yard. The per-ship cost works out to a maximum of around $121m, according to the report. Each vessel will have a deadweight tonnage of 343,000 dwt, placing them squarely in the VLOC segment that serves long-haul iron ore routes from Brazil and Australia to China.
| Vessel detail | Specification |
|---|---|
| Number of vessels | 6 |
| Deadweight tonnage | 343,000 dwt each |
| Maximum unit cost | ~$121m per ship |
| Total investment | RMB4.93bn ($728m) |
| Builder | China Merchants Shipbuilding Industry |
| Delivery window | 2029–2030 |
| Intended employment | Long-term contracts of affreightment with major commodity traders |
CMES plans to establish six offshore single-ship companies for the newbuildings, Splash247 reported. The contracts have not yet been signed and remain subject to approval at a shareholder meeting scheduled for July 28. The owner intends to fund the project through a combination of cash on hand and external financing, with payments spread across the construction period.
Strategic Context
The deal is CMES’s first VLOC newbuilding order in over a decade. The owner last moved for this type of tonnage in 2015, when it booked 10 Valemaxes, Splash247 noted. The fresh investment follows a separate 10-ship programme unveiled earlier this month, which includes five aframax tankers, four 1,800 TEU containerships, and one 210,000 dwt newcastlemax bulk carrier. That earlier order diversifies CMES’s portfolio across tanker, container, and bulk segments, while the new VLOC order reinforces its commitment to the dry bulk sector.
Financing and Timeline
Deliveries of the six VLOCs are scheduled across 2029 and 2030, meaning the new capacity will not enter the market for at least three years. The payment schedule—linked to construction milestones—and the use of external financing help manage the capital outlay, which at $121m per ship is substantial even by VLOC standards. Splash247 reported that the contracts remain unsigned pending the July 28 shareholder vote, creating a potential inflection point for the deal.
Watch List
- Shareholder meeting on July 28, 2026: Approval is required for the contracts to be signed. Any delay or rejection could alter CMES’s fleet expansion timeline.
- Financing details: The mix of cash and external financing, and the interest rate environment, will affect the final cost of the programme.
- Commodity trader commitments: The vessels are earmarked for long-term contracts of affreightment with major commodity traders; if those contracts are not secured, the ships may enter the spot market, affecting rate dynamics.
- Competitor response: Other bulk carriers may evaluate similar orders, potentially increasing the VLOC orderbook and influencing future supply-demand balances on iron ore routes.
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