French liner major CMA CGM has reportedly signed a letter of intent (LOI) with two Chinese yards on the construction of up to nine 22,000 TEU megaships.
Specifically, in line with the LOI, CSSC Hudong-Zhonghua would be in charge of constructing five ships from the batch, while Shanghai Waigaoqiao Shipbuilding (SWS) would be entrusted with building the remaining four units, a South Korean securities brokerage company said.
Previous reports identified SWS as the main competitor for the deal alongside its South Korean rival Hyundai Heavy Industries (HHI). The order, estimated to be worth USD 1.5bn, is said to be comprised of six firm ships and three options.
The ships, world’s largest, would feature dual-fuel engines, and be powered by LNG.
The boxship giants are likely to be delivered by 2020.
Neither of the three companies has replied to World Maritime News to the market rumors on the deal so far.
If confirmed, the ships would disrupt the abstention from new orders for big ships present on the market since the third quarter of 2015, adding further to the overall overcapacity in the container shipping sector.
According to Drewry, the existing orderbook is already close to 3 million TEU due by the end of 2020, to add the active fleet that recently passed the 20 million TEU milestone.
The bulk of new deliveries will arrive before 2019 and are heavily skewed at the top end of the range with 18,000+ TEU units taking up nearly 40% of the orderbook.
Speaking of the alleged order, Søren Skou, CEO of Maersk, Danish shipping conglomerate, said there is no incentive to order new ultra large containerships from a cost perspective right now, despite extremely low prices of newbuilding tonnage.
As highlighted by Skou, five years ago large ships were ordered due to fuel economy, however, this advantage has been minimized, if not disappeared entirely, given the current oil price levels.