Sungdong Shipbuilding bags $250m Vale deal
South Korea’s Sungdong Shipbuilding & Marine Engineering has won its first major bulker order this year, with a $250m deal for four 180,000 dwt capesize vessels from Vale, the Brazilian iron ore producer.
The shipbuilder told Lloyd’s List that refund guarantees to support the financing and staged construction payments on the ships had already been issued by the Korea Export-Import Bank.
“Vale is very rich,” said a shipyard source. “We don’t worry about finance.”
He said it was also the first time Vale had ordered ships at Sungdong Shipbuilding. He confirmed that the total price for the four ships was about $250m but declined to give details about the individual pricing of the ships.
He added that the first of the four ships is due for delivery towards the end of 2010. The remaining three vessels will be delivered in 2011. The DNV-classed ships will be 295 m long and 45 m wide with a service speed of around 15 knots.
In the past months Vale has transformed itself from ship operator to shipowner.
After allocating $595m on investment in its maritime shuttle service to Asia in 2009, Vale spent $98m on secondhand vessels in the first half of this year as well as paying $154m in disbursements on 12 very large oil carriers being built at Rongsheng Shipbuilding and Heavy Industries in China.
In the first eight months of the year, the Rio de Janeiro-based company has acquired as many as 15 bulkers and very large crude carriers for conversion in the secondhand market.
A recovery in freight rates and the subsequent inflationary impact on the price of secondhand vessels has resulted in the Brazilian iron ore giant turning its attention to newbuildings, said a Brazilian broker that declined to be named.
“With a modern five-year-old capesize vessel trading on the secondhand market for around $56m in July, Vale clearly feels it can get better value with newbuildings,” said the broker.
Another insider working with the group on expanding its fleet said that Vale’s acquisitions were likely to continue. “Their appetite is immense [their spending] is not over yet,” he said.
Vale was unavailable for contact.
The Vale deal meant Sungdong Shipbuilding no longer had any capesize berths left for 2010 delivery and the earliest delivery the yard could offer was 2011.
Commenting on the affects of the downturn in the maritime markets, the source said the yard had lost orders for around 15 capesize vessels. But some of these contracts had been converted into orders for tankers and other ship types. He said the yard’s current capesize orderbook stood at between 35-37 ships against more than 50 originally.
Asked if the Vale contracts included clauses covering possible prices escalations for raw materials including steel, the insider said steel prices did not pose such a problem as last year.
“Last year we were affected by the high steel price, but it has gone down so it is not a problem,” he added.
Clarkson Research said Sungdong Shipbuilding has an order backlog of 93 ships, not including the Vale quartet. Most of the ships are 170,000 dwt bulkers, but they include six 114,000 dwt aframax tankers, nine 158,000 dwt suezmax tankers and five 6,500 teu boxships.
Two of the suezmax tankers were ordered by the Tsakos Group in the middle of July, while an unknown owner booked another pair of suezmax tankers at the end of last month. All four are due for delivery in 2011.
The shipbuilder told Lloyd’s List that refund guarantees to support the financing and staged construction payments on the ships had already been issued by the Korea Export-Import Bank.
“Vale is very rich,” said a shipyard source. “We don’t worry about finance.”
He said it was also the first time Vale had ordered ships at Sungdong Shipbuilding. He confirmed that the total price for the four ships was about $250m but declined to give details about the individual pricing of the ships.
He added that the first of the four ships is due for delivery towards the end of 2010. The remaining three vessels will be delivered in 2011. The DNV-classed ships will be 295 m long and 45 m wide with a service speed of around 15 knots.
In the past months Vale has transformed itself from ship operator to shipowner.
After allocating $595m on investment in its maritime shuttle service to Asia in 2009, Vale spent $98m on secondhand vessels in the first half of this year as well as paying $154m in disbursements on 12 very large oil carriers being built at Rongsheng Shipbuilding and Heavy Industries in China.
In the first eight months of the year, the Rio de Janeiro-based company has acquired as many as 15 bulkers and very large crude carriers for conversion in the secondhand market.
A recovery in freight rates and the subsequent inflationary impact on the price of secondhand vessels has resulted in the Brazilian iron ore giant turning its attention to newbuildings, said a Brazilian broker that declined to be named.
“With a modern five-year-old capesize vessel trading on the secondhand market for around $56m in July, Vale clearly feels it can get better value with newbuildings,” said the broker.
Another insider working with the group on expanding its fleet said that Vale’s acquisitions were likely to continue. “Their appetite is immense [their spending] is not over yet,” he said.
Vale was unavailable for contact.
The Vale deal meant Sungdong Shipbuilding no longer had any capesize berths left for 2010 delivery and the earliest delivery the yard could offer was 2011.
Commenting on the affects of the downturn in the maritime markets, the source said the yard had lost orders for around 15 capesize vessels. But some of these contracts had been converted into orders for tankers and other ship types. He said the yard’s current capesize orderbook stood at between 35-37 ships against more than 50 originally.
Asked if the Vale contracts included clauses covering possible prices escalations for raw materials including steel, the insider said steel prices did not pose such a problem as last year.
“Last year we were affected by the high steel price, but it has gone down so it is not a problem,” he added.
Clarkson Research said Sungdong Shipbuilding has an order backlog of 93 ships, not including the Vale quartet. Most of the ships are 170,000 dwt bulkers, but they include six 114,000 dwt aframax tankers, nine 158,000 dwt suezmax tankers and five 6,500 teu boxships.
Two of the suezmax tankers were ordered by the Tsakos Group in the middle of July, while an unknown owner booked another pair of suezmax tankers at the end of last month. All four are due for delivery in 2011.
