From VLCC to VLOC

Dear Readers
We have been to COSCO’s commercial headquarters at the ‘Manhattan’ of Shanghai in the Pudong area and discussed conversions. To convert a large tanker into an ore carrier is a massive piece of work. It requires not only construction skills and production capacity, but also creative thinking and design competence.
Although the ship is changed so drastically from wet to dry bulk cargoes it may not necessarily be regarded as a major conversion from all aspects. The result may be attractive. A vessel capable of carrying 250,000 tonnes of iron ore at 18.9 metres draft may be an attractive ship provided the loading and discharge ports can accommodate length and breadth.
At the DNV office in Shanghai we have been busy working closely with COSCO on conversions, and we can ensure that a converted VLOC is a structurally sound vessel with a double hull built to our rules by a shipping group possessing state-of-the-art know-how – matched by a tremendous capacity to perform the needed actions.
Once your new VLOC is ready to trade, likely routes are Australia to China or Europe, and Brazil to China or Europe. When looking at just the needs for transport of the world’s third largest steel producer, Baosteel of Shanghai, this becomes apparent. Today the group produces some 45 million tonnes of steel, forecast to almost double over the next five years or so. To achieve this, no less than 150 fully loaded Capesize bulk carriers are serving Baosteel per year.
Of course, another way to get a VLOC is to order a brand new one. We have also visited the Bohai shipyard where the investment in a brand new production facility amounts to close to three billion RMB. At Bohai, BW Shipping has ordered a series of no less than four new VLOCs which will be the largest bulk carriers ever for iron ore transport. These are the largest dry cargo ships of all categories.
Additionally, we have been talking to Anglo Eastern, Wallem and Parakou in Hong Kong, all seasoned bulk carrier operators, and to China Steel Express in Taiwan.
The Greater China shipping industry – yards, owners and managers – possesses shipping and bulk carrier competence and we hope we have been able to capture some of this here. DNV puts considerable effort into serving the industry, and our growth in the region is very rapid. We are training our staff to ensure that they are able to cope with the workload. We have introduced a programme for this, which you will also find in this ‘focus on China’ issue of Bulk Carrier Update.
Finally we have some very interesting views on the market from Fearnley’s and Jarle Hammer.

Ulf Freudendahl
DNV Business Director, Bulk Carriers

Date: 30 January 2008