Fri, Jun 15, 2012 - Page 12 News List

U-Ming expects shipping rebound next year

By Amy Su  /  Staff reporter

U-Ming Marine Transport Corp (裕民航運), the nation’s largest bulk shipper by fleet scale, expects the industry to start rebounding in the second half of next year, on the back of steady growth in demand and slowing oversupply pressure.

U-Ming Marine, a member of the Far Eastern Group (遠東集團), began carrying out its fleet replacement plan in the first half of this year amid lower shipbuilding costs because of the global economic downturn.

“We should be a little more optimistic on the sector,” U-Ming Marine chairman Douglas Hsu (徐旭東) told reporters on the sidelines of the company’s shareholders’ meeting yesterday.

Despite widespread economic uncertainties, Hsu said global trading volume for bulk materials — such as iron ore, coal, grains and cement — might continue to show stable year-on-year expansion of 5 percent, with growing momentum in the China market spurring growth.

Therefore, controlling supplies will become the major factor driving up freight rates and improving industry sentiment.

According to data collected by Clarksons, the world’s largest shipbroker, the worldwide volume of delivered ships will peak this year, with the growing level of industry capacity surpassing demand.

However, U-Ming Marine president C.K. Ong (王書吉) said he expects supply to slow from the second half of next year, offering the industry a chance to boost profitability.

Amid a business slowdown last year, which dragged down shipbuilding prices, the company decided to replace aged ships in its fleet.

Two new Supramax vessels, each rated 57,000 deadweight long-tonnes (DWT), are expected to be delivered to U-Ming Marine next month by COSCO (Zhoushan) Shipyard (舟山中遠船務), a subsidiary of COSCO Shipyard Group Co Ltd (中遠船務工程集團) in China, the company said in a statement.

Shanghai Waigaoqiao Shipbuilding Co (上海外高橋造船) will deliver a 206,000 DWT capesize carrier in October, the statement said.

Following the delivery of the three ships, the company plans to sell three vessels this year to balance its fleet scale. It sold one last month — which made US$7 million in net profit — and expected to sell two more.

For next year and 2014, two 82,000 DWT Kamsarmax bulk carriers, as well as seven 186,300 DWT capesize vessels will be delivered, which may help expand U-Ming Marine’s fleet size.

Shareholders yesterday approved a NT$3 cash dividend per share for this year, based on its net profit last year of NT$2.73 billion (US$91.14 million), or NT$3.18 per share.

Meanwhile, Evergreen Marine Corp (長榮海運), the nation’s largest container shipping firm, yesterday said it maintains an optimistic view on the container shipping sector for this year and next year.

Evergreen Group vice chairman Bronson Hsieh (謝志堅) said industry sentiment may not be as low as the sentiment for the global economy because major container shippers had controlled capacity carefully, strengthening the sector’s profitability.

“None of Evergreen Marine’s vessels has been idled for now,” Hsieh said.

Building larger vessels and deepening cooperation with other shippers will be the two main trends shaping the industry in the near future, Hsieh said, adding that competing on its own would become unfeasible.

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