CSSC, CMA CGM sign record-breaking $3 billion deal for 16 ultra-large boxships

CMA CGM has reportedly signed the largest container ship building contract in China for a total of 16 new vessels to be built by yards within the China State Shipbuilding Corporation (CSSC) group. The order comes as part of a series of deals struck by French companies during a state visit by French President Emmanuel Macron and European Commission President Ursula von der Leyen.

Chinese state media release the first news of the deal, which was also reported to the EU by the Chinese Chamber of Commerce. They say CMA CGM has signed an order for two classes of ships totaling 21 billion Chinese yuan (nearly $3.1 billion). The deal, signed in Beijing on April 6, would be the largest contract ever to be built for container ships and a continuation of CMA CGM’s longstanding relationship with the Chinese state-owned shipbuilder.

The order is also the first for China for methanol dual-fuel container ships. Twelve of the ships will have a capacity of 15,000 TEU and will use a methanol-capable engine. In addition, CMA CGM has ordered four more 23,000 TEU LNG dual-fuel vessels, likely a continuation of the Jacques Saade Class built by CSSC with the first ship being introduced in 2020. There are indications that the order will be split between the Hudong-Zhonghau, Jiangnan and Dalian shipyards. No timeline has been announced for the delivery of the ships.

Macron made his first state visit to China in three years to strengthen economic ties and gain China’s support for the war in Ukraine. The trip began on Wednesday, April 5, and ended today with a rare face-to-face meeting with China’s President Xi Jinping. Chinese media highlighted the visit as an opportunity to strengthen the country’s ties with Europe and counter American containment policies against China.

The South China Morning Post reports that France and China expanded their economic ties to over $100 billion for the first time in 2022. France indicated that around 20 major economic agreements were signed during the visit, which ended today. In addition to CMA CGM, Airbus has agreed to expand production in China and Alstom has made new arrangements. French Electric Power Company (EDF) has signed a new nuclear contract and will also partner with China Energy Investment Corporation for a wind power project. Consumer companies, including L’Oreal and French pork producers, have also struck deals.

CSSC highlighted a visit to the company by CMA CGM Chairman Rodolphe Saadé in February 2023. During the visit to CSSC, he met with China State Shipbuilding Corporation chairman Wen Gang and senior executives to spark speculation that CMA CGM was preparing to place another large shipbuilding contract.

The two companies have been working together for a decade, with CSSC reporting that CMA CGM has ordered more than 70 container ships to be built in China. This includes more than 30 ships delivered, including the first Chinese-built 18,000 TEU ultra-large boxships and the Jacques Saade class, which were the first large LNG-powered container ships. The CSSC shipyards have built a total of nine ships, each with a capacity of just over 23,000 TEU.

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