China's Shipbuilding Boom: Hudong-Zhonghua and Cosco Secure Massive Global Orders

Shanghai-based Hudong-Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corporation (CSSC), has secured a landmark 10-billion-yuan ($1.5 billion) contract to construct 12 very large crude carriers (VLCCs) for Greece-based Dynacom Tankers Management.

Construction is slated to begin in 2027, utilizing cutting-edge designs from the Marine Design and Research Institute of China. To mitigate exchange rate volatility and protect project margins, Hudong-Zhonghua has implemented a dual-currency payment framework, allowing overseas shipowners to settle transactions in both Chinese yuan and US dollars.This approach helps manage exchange rate risks associated with projects and maximizes project profitability.

In a separate development, a unit of Cosco Shipping Energy Transportation announced plans to invest 6.4 billion yuan ($880 million) in four liquefied natural gas (LNG) carriers. The vessels will be chartered to Shell Tankers Singapore under a long-term lease expected to generate approximately 5.4 billion yuan ($745 million) in revenue for the Cosco subsidiary.