U-Ming Marine Transport Corp (裕民航運), a member of the Far Eastern Group (遠東集團), yesterday placed an order with Shanghai Waigaoqiao Shipbuilding Co (上海外高橋造船) to build 10 capesize vessels, the company said in a stock exchange statement.
Taipei-based U-Ming Marine’s business mainly focuses on shipping bulk raw materials, such as iron ore, coal, grains and cement, while Shanghai Waigaoqiao is a unit of state-owned China Shipbuilding Trading Co (中國船舶工業貿易), with its headquarters in Beijing.
The company’s plan to spend up to US$500 million on new ships comes as the price of new dry-bulk vessels slid to an eight-year low and major shipbuilders in Asia are offering discounts to woo new customers in the face of an industrial slump.
U-Ming Marine president C.K. Ong (王書吉) said in September last year that he expected this year to be a “difficult year” for the dry-bulk market because of the launch of more large ships and higher iron-ore production in China.
However, the imbalance between supply and demand in shipping capacity had recently improved slightly as the pace at which aging ships are retired had accelerated, while the addition of new ships had slowed, the Chinese-language United Evening News quoted Ong as saying yesterday.
U-Ming Marine said in the statement that it had ordered four 186,300 long deadweight tonnage (DWT) capesize vessels from Shanghai Waigaoqiao, with an option for orders of six more, according to the statement filed with the Taiwan Stock Exchange.
The capesize vessels will be built for U-Ming Marine Transport (Singapore) Private Ltd (裕民航運[新加坡]私人有限公司), with each ship expected to cost US$49.83 million, the company said, adding that delivery for the first four vessels was scheduled to start in 2014.
“The purpose of the shipbuilding plan is to retire aging ships from the company’s fleet and help develop new business,” U-Ming Marine said.
According to data collected by Clarkson, the world’s largest shipbroker, the price of a new capesize ship fell to US$47.5 million this month, compared with US$48 million last month and marked the lowest level since October 2003, when the price was US$43.5 million.
The price of capesize vessels, which account for about 40 percent of the world’s dry-bulk fleet capacity, declined 14 percent over the past year, Clarkson said.
Additional reporting by Bloomberg
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