Wider fluctuations in the crude oil shipping market have prompted Shanghai-listed Tianjin Marine Shipping (TMSC) to hold back the order for its first four very large crude carriers (VLCCs).
The company’s management will take a prudent approach in using part of the CNY12 billion (USD2 billion) funds raised in a private placement in 2014 to fund the newbuildings, Liang Liu, president of TMSC, told IHS Maritime on 5 May.
TMSC’s business is mainly in China’s cabotage trade routes and short-sea routes.
The Chinese container carrier plans to order the first four of 10 VLCCs at an aggregate cost of up to USD400 million, the company said. It is currently in the process of tendering work over the four VLCCs.
In 2013, TMSC said it planned to order 10 VLCCs and four LNG carriers after raising funds by a private placement. It estimated that the VLCCs would cost USD90 million each, with the LNG carriers valued at USD200 million each.
The company noted in its annual report for 2014 that newbuilding prices for VLCCs and LNG carriers had increased during the year.
The company returned to the black in 2014 on a reversal of write-down for disputed funds. TMSC’s profit totalled CNY78.9 million in 2014, up from a loss of CNY130.2 million in 2013.