China Wins CMA CGM $1.4 Billion Ship Order

CMA CGM has placed its order for the next biggest containerships in the world with China’s Hudong Zhounghua Shipbuilding and Shanghai Waigaoqiao Shipbuilding, according to Pulse.

The third largest company in the sector has ordered nine container vessels with a capacity of 22,000 twenty-foot equivalent units (TEU).

The series of ships will topple the current leader, the 21,413 TEU OOCL Hong Kong, which recently knocked Maersk from the top spot in May after Samsung Heavy Industries (SHI) finished its construction.

Losing the order to two Chinese rivals will be a major setback for South Korea’s largest shipbuilder Hyundai Heavy Industries, which was seen as a likely contender for clinching the US$1.44 billion container ship deal.

Yang Hyeong-mo, Analyst at eBest Investment & Securities, told Pulse: “The client was seeking $160 million per vessel with a dual-fuel option, but Korean shipbuilders offer such vessels at $175 million.”

Shipping financing from the Chinese government and the fact that the French shipper was on the same shipping alliance with China Ocean Shipping could have been another contributing factor in the Chinese firms winning.

Hyundai Heavy Industries shares were down 4.49% on Monday at $130.8.

Drewry recently warned that sustainable ocean carrier profitability may be lost due to CMA CGM’s order.

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