Since receiving its first order last year, Jiangmen Nanyang Ship Engineering, which had long focused on building Handysize bulk carriers, has been continuously expanding its product portfolio, steadily increasing its influence in the Ultramax bulk carrier market.
On September 30, Jinhui Group announced that, through three of its wholly-owned subsidiaries, it signed shipbuilding contracts with Jiangmen Nanyang Ship Engineering Co., Ltd. for three 64,500 dwt bulk carriers. The new vessels are scheduled for completion and delivery on or before January 31, 2028, February 29, 2028, and March 31, 2028, respectively. The price for each new vessel is approximately $33.05 million, with a total transaction value of about $99.15 million (approximately RMB 706 million).
For reference, Clarksons data shows that the current price for a 61,000-64,500 dwt Ultramax bulk carrier is approximately $33.25 million, a 4% decrease compared to $34.75 million during the same period last year.
Jinhui Group stated that the contract amount will be paid in US dollars in cash. It is expected that approximately 70% of the total contract price will be funded by bank financing, with the remainder to be provided by the Group’s internal resources. The pricing was determined through fair negotiation, taking into comprehensive consideration the shipyard’s quotation, the delivery schedule, and recent market transactions for similar vessels.
Jinhui Group pointed out that the Group’s principal business is the international leasing and ownership of vessels. The acquisition of these three vessels aligns with the Group’s ongoing strategy of renewing its fleet with modern, larger, and higher-quality vessels, while gradually phasing out older vessels and replacing them with newer ones with lower ages. The availability of suitable, modern, and low-age vessels on the second-hand market is highly volatile. Currently, it has not been possible to source high-quality, low-age second-hand vessels on the market that possess the right specifications, favorable delivery timing, and reasonable pricing.
In light of increasingly stringent maritime regulations, Jinhui Group decided to order newbuildings that can comply with the latest requirements and incorporate specialized designs. Compared to other bulk carriers currently operated by the Group, these new vessels offer higher fuel efficiency and operational efficiency, meeting the latest environmental regulations and current statutory requirements of the shipping industry. This decision supports the company’s long-term goal of maintaining a young and modern fleet to provide better services to its customers and meet the specific needs of their freight trades and destinations. Upon delivery, the new vessels will be chartered to third-party companies for the transportation of dry bulk commodities, generating vessel rental income and providing the Group with recurring freight and rental revenue.
Currently, Jinhui Group operates a fleet of 29 vessels, comprising 21 owned vessels and 8 chartered-in vessels, with a total carrying capacity of approximately 2.2 million dwt. Among the owned vessels, 2 have been arranged under sale and leaseback agreements, and 1 has been sold and reclassified as an asset held for sale.
It is understood that Jinhui Group is an investment holding company, operating a global shipping business through its subsidiary, Jinhui Shipping and Transportation Limited, in which it holds a 55.69% equity interest. The Group’s shipping business began in the 1980s, and it currently operates a modern fleet of bulk carriers ranging from Supramax to Capesize. In 1991, Jinhui Group was listed on The Stock Exchange of Hong Kong Limited as a holding company for several ship-owning and ship-chartering subsidiaries. In 1994, Jinhui Shipping was listed on the Oslo Stock Exchange in Norway.
In recent years, Jinhui Shipping has been expanding its fleet through chartering and acquiring second-hand vessels, until it placed an order for two 63,500 dwt bulk carriers at Jiangsu Hantong Ship Heavy Industry in June last year. Prior to this, Jinhui Shipping’s last appearance in the newbuilding market dates back to 2014, when the company, through the intermediary Sumitomo Corporation, placed an order for one 60,000 dwt bulk carrier at Japan’s Oshima Shipbuilding. Originally scheduled for delivery in March 2016, Jinhui Shipping decided to cancel this order in 2015 due to the market downturn, in order to reduce future capital expenditure.
Jinhui Shipping’s latest order will further enhance Jiangmen Nanyang Ship Engineering’s market share in the Ultramax bulk carrier construction sector. It is understood that Jiangmen Nanyang Ship Engineering specializes in the construction of small Handysize bulk carriers. Over the past decade, it has successively developed and launched the 39,000 DWT Green Eco-Handy bulk carrier, the B-Type 39,000 DWT Green Eco-Handy bulk carrier, the 39,800 DWT multi-functional bulk carrier, and the 40,000 DWT Green Eco-Wide-Hatch bulk carrier.
Last year, Jiangmen Nanyang Ship Engineering entered the Ultramax market for the first time. Over the past year or so, it has successively secured orders for a total of 22 units of 64,500 dwt bulk carriers from several Chinese and Japanese shipowners, setting a new record for the shipyard’s construction history.
Including the latest orders, Clarksons data shows that Jiangmen Nanyang Ship Engineering currently holds a total orderbook of 63 vessels amounting to 3.0795 million dwt. This includes 22 units of 64,500 dwt Supramax and 41 units of 40,500 dwt Handysize bulk carriers, with deliveries scheduled until 2028.
