COSCO Shipping Development's order for 24 dry bulk vessels worth $1.27bn will add significant tonnage to the dry bulk market from mid-2029, with all ships under long-term charter to COSCO Shipping Bulk subsidiary Huifeng. This leasing play deepens COSCO's in-house ship leasing business and ties the order to the Hainan Free Trade Port's renminbi initiatives, according to Splash247.
Vessel Breakdown and Yard Allocations
The order, placed through wholly owned subsidiary Hainan COSCO Shipping Development Shipping, comprises twenty 87,000 dwt multi-purpose grain carriers and four 210,000 dwt newcastlemaxes. Vessels will be built at yards controlled by COSCO Shipping Heavy Industry and China State Shipbuilding Corporation (CSSC), Splash247 reported.
| Vessel Type | Yard | Quantity | Unit Price (RMB) | Total (RMB) |
|---|---|---|---|---|
| 87,000 dwt grain carrier | COSCO Shipping Heavy Industry, Dalian | 15 | 319 million | 4.79 billion |
| 87,000 dwt grain carrier | CSSC Chengxi Shipbuilding | 5 | 319 million | 1.595 billion |
| 210,000 dwt newcastlemax | Dalian Shipbuilding Industry Corporation | 2 | 528 million | 1.056 billion |
| 210,000 dwt newcastlemax | Beihai Shipbuilding | 2 | 610 million | 1.22 billion |
The 210,000 dwt vessels will be methanol- and ammonia-ready, according to Splash247.
Leasing Structure and Hainan Free Trade Port
All 24 ships will be leased on long-term contracts to Huifeng, a subsidiary of COSCO Shipping Bulk. Each lease runs for 240 months (20 years), plus or minus 120 days, from delivery. Notably, the lessee will have no obligation to purchase the vessels at the end of the charter period, Splash247 reported.
COSCO linked the orders to use of the Hainan Free Trade Port, stating the structure would support wider application of the renminbi across shipbuilding, leasing, and shipping.
Implications for Dry Bulk Shipping
The order adds substantial dry bulk capacity for COSCO Shipping Bulk, particularly in the grain and large bulk segments. The 87,000 dwt grain carriers are versatile for grain trade, while the newcastlemaxes are typically deployed on coal and iron ore routes. Deliveries beginning mid-2029 through end-2030 mean the tonnage will enter service during a period when fleet renewal and emissions regulations are reshaping supply.
The leasing structure, with no purchase obligation, allows COSCO to retain ownership while providing Huifeng with long-term, stable tonnage. The involvement of Hainan Free Trade Port highlights COSCO's strategy to leverage the port's financial policies to reduce currency risk in shipbuilding and leasing contracts.
Watch list:
- Deliveries starting in mid-2029: capacity additions will be gradual but significant.
- The methanol/ammonia readiness of the newcastlemaxes positions them for future alternative fuel adoption.
- Any expansion of the Hainan Free Trade Port's renminbi-denominated ship financing could attract other Chinese shipping companies to similar structures.
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