The global shipping industry is witnessing a remarkable surge in containership construction orders, with China at the forefront of this dynamic landscape. In a significant development, the latest batch of orders includes another deal denominated in the Chinese currency, the RMB (Yuan), further solidifying China's influence in the maritime sector.

Charting a Course for Dominance: China's Shipbuilding Prowess on Display

COSCO and Wan Hai Lead the Charge

The two Asian carriers, COSCO and Wan Hai, have each placed a series of orders, but their approaches to expansion differ. COSCO has opted for conventionally fueled vessels, with its overall orders amounting to around 1 million TEU of capacity (58 vessels). In contrast, Wan Hai is continuing its focus on alternative fuels, placing two additional orders for methanol-fueled containerships, following its previous orders in August for similar vessels.

Strengthening the RMB's Global Footprint

The latest order from COSCO, signed on October 28 with Hudong-Zhonghau, a subsidiary of China State Shipbuilding Corporation (CSSC), is particularly significant. The deal, valued at an estimated $900 million, is denominated in the RMB (Yuan) currency, a departure from the traditional use of the U.S. dollar. This move reduces currency conversion exposure, increasing profit for the shipyard and lowering financing costs and exposure for the owners. It is a clear indication of China's efforts to internationalize its currency and further solidify its leadership in the global shipbuilding industry.

Hudong-Zhonghau's Impressive Order Book

China is also highlighting the success of Hudong-Zhonghau in securing containership construction orders. According to reports, the yard has booked 21 large containership orders in 2024, across four batches of three different types, with a total value exceeding $2 billion. This impressive order book underscores the yard's capabilities and the growing demand for Chinese-built vessels.

Wan Hai's Ambitious Expansion Strategy

Wan Hai, on the other hand, is moving aggressively with its expansion plans, which have the potential to propel the carrier into the top 10 ranking in the sector by capacity. The company's latest order, valued at $1.6 billion, is split between South Korea's Hyundai Samho Heavy Industries and Samsung Heavy Industries, with each yard building half of the total order for eight 16,000 TEU vessels.

Navigating the Challenges of Overcapacity

Analysts continue to speculate about the potential for overcapacity in the containership market, even as the orderbook remains at record highs. Alphaliner calculates that the top 10 carriers have over 6 million TEU of new capacity on order currently. This dynamic landscape presents both opportunities and challenges for industry players, as they navigate the complexities of supply and demand.In conclusion, the latest developments in the global shipbuilding industry showcase China's growing influence and the strategic importance of the RMB (Yuan) in the maritime sector. As COSCO and Wan Hai continue to expand their fleets, the industry will closely watch the interplay between market forces, technological advancements, and the shifting geopolitical landscape that shape the future of global shipping.