The Singapore branch of domestic chemical fiber giant Rongsheng Petrochemical (002493) has purchased at least 7 million barrels of Middle Eastern crude oil since October for the trial operation of the expanded refinery in Zhejiang Province this quarter. Delivery in January.
To build 30 VLCCs, Rongsheng Petrochemical plans to build its own fleet.
We learned earlier from foreign media that Zhejiang Rongsheng Holding Group will cooperate with CSSC and place an order to build up to 30 VLCCs.
It is said that the two companies will establish a joint venture to advance the order plan. The order is likely to be taken by a shipyard controlled by China State Shipbuilding Corporation, the parent company of CSSC.
Industry sources said that Rongsheng Petrochemical, a subsidiary of Rongsheng Holdings, plans to set up a VLCC fleet to transport crude oil from the Middle East to its Zhoushan, Zhejiang New refinery.
A source from a shipbuilding company said, “Rongsheng Holdings and CSSC Leasing may not order all 30 ships at once.”
“Negotiations are currently underway, and they may first start orders for 2 to 10 new ships, and the rest of the orders will be advanced later.”
In addition, the shipyards specifically undertaking the construction of VLCCs are also It has not been disclosed, but it is believed that Shanghai Waigaoqiao Shipbuilding, Dalian Shipbuilding Industry Co., Ltd. and Guangzhou Shipyard International, which are owned by China State Shipbuilding Corporation, will compete for the order.
Sources in the shipbuilding industry said that Rongsheng Group is looking to provide conventional fuel for VLCC.
A shipbuilding industry market source said, “The Chinese shipyard’s quotation for VLCC is around US$85 million, but we think the price can be around US$83 million.”
In fact, Rongsheng Holdings has shown interest in owning its own fleet since last year.
A tanker expert said, “The cooperation between the two companies will be a win-win situation.”
China’s shipyards are eager to get orders, and since becoming a listed company, CSSC Rental is also actively seeking to expand its business.
“The current shipbuilding prices are quite attractive, and the surge in tanker rates a few months ago may be a boost for Rongsheng Holdings’ decision to build its own fleet.”
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Rongsheng Petrochemical said, “After the first phase of Zhejiang Petrochemical’s ’40 million tons/year refining and chemical integration project’ was put into operation, the production of each device has progressed smoothly, and profitability has gradually emerged. The second phase of the project has now entered the on-site implementation stage. , plans to start trial operation in the fourth quarter of 2020.”
“Rongsheng Petrochemical will have a third refinery. Once the third phase of the project is completed, the company’s annual output of petrochemical products will reach 60 million tons. “The source said frankly.
A Shanghai-based tanker expert estimates that if all three refineries are put into operation, Rongsheng Holdings will need about 30 VLCCs to transport Middle Eastern crude oil to Zhoushan.
He added that Rongsheng Holdings began to target VLCC through a company in Singapore called Rongsheng International Trading at the end of 2018. Rongsheng Petrochemical’s cargo mainly comes from Saudi Arabia, and Rongsheng International Trading Company only comes to finalize the tankers. </p
