548 million yuan! Shandong Ocean Shipping orders medium and large-sized bulk carriers for the first time

Shandong Port Shandong Far East Shipping Group Co., Ltd. will order two 95,500-dwt Panamax bulk carriers from Hengli Heavy Industry.

These two new vessels will use traditional fuel and have a total value of approximately 548 million yuan, equivalent to a construction cost of 274 million yuan (approximately US\$36.8 million) per vessel. For reference, Clarksons' data shows that the price of a new 93,000/96,000-dwt traditional fuel bulk carrier is currently around US\$45.5 million, a 2% decrease compared to US\$46.5 million in the same period last year.

This latest order marks Shandong Far East Shipping Group's first foray into the mid-to-large bulk carrier market. It is understood that Shandong Far East Shipping Group was reformed from Shandong Port Shipping Group and officially changed its name on August 1, 2024. Currently, the company operates a total of 38 container routes, including 25 domestic and foreign feeder routes around the Bohai and Yellow Seas, 5 domestic trunk routes, and 8 international routes. It operates more than 60 vessels of various types, with a total carrying capacity of 1.1 million deadweight tons.

Established in March 2020, Shandong Port Shipping Group is a professional shipping company affiliated with Shandong Port Group. It mainly engages in container transportation and agency, oil refueling and transportation, dry bulk transportation, passenger and cargo liner transportation, and other businesses. Leveraging the integrated operational resource advantages of Shandong Port Group, the shipping group adheres to a customer-centric approach, continuously strengthens its shipping capabilities, promotes the integration of shipping resources, and has created five service brands: "Korea-Japan-Daily Arrival," "Shandong Port Express," "Peninsula Express," "Oil Transportation Bus," and "South-North Transportation." These efforts have made positive contributions to supporting local economic development and promoting the construction of Shandong Port as a world-leading logistics hub.

It is understood that the predecessor of Hengli Heavy Industry, STX Dalian, was once China's largest foreign-funded shipyard and possessed the largest single shipyard in northern China. In January 2023, Hengli Heavy Industry officially put into operation the Phase I project "Ocean Factory," revitalizing STX Dalian. In the second year of full operation, Hengli Heavy Industry gradually entered a stage of rapid development, successively achieving major milestones such as the early delivery of its first vessel, the successful delivery of its first engine, the launch of its first 306,000-ton VLCC, and the commencement of construction of various ultra-large vessels.

In January of this year, Hengli Heavy Industry officially put into operation its Phase II project, the "Future Factory," with an investment of nearly 10 billion yuan. The "Future Factory" focuses on high value-added green vessels and high-end marine engineering equipment manufacturing, including VLCCs, ultra-large liquefied gas carriers (VLGCs), ultra-large container ships, floating production storage and offloading units (FPSOs), offshore floating wind power, and drilling platforms. Upon reaching full production capacity, Hengli Heavy Industry will be able to process 2.3 million tons of steel annually, produce 180 marine engines annually, and achieve full coverage of LNG, LPG, methanol, and ammonia dual-fuel engines.

Since the beginning of this year, the production efficiency of Hengli Heavy Industry's "Ocean Factory" has been continuously improving, and the production capacity of the "Future Factory" has been continuously released, ushering in a new stage of high-efficiency construction and rapid development. Going forward, Hengli Heavy Industry will continue to adhere to the principle of prioritizing quality, strengthening refined management, continuously promoting technological innovation, and striving to provide shipowners with more customized vessels with superior performance and leading technology, jointly promoting the high-quality development of the shipbuilding and shipping industries.

As of now, Hengli Heavy Industry has a backlog of approximately 170 orders, mainly from European shipowners, with delivery dates extending to 2029.