Taiwan newbuild binge might herald prices have bottomed

Taipei: Traditionally the conservative nature of Taiwan owners dictates that they have a habit of ordering new ships at the very bottom of the price cycle. Judging by the current binge from the island’s owners it looks like newbuild prices may well have come close to bottoming out, much to the relief of loss making yards in China and elsewhere.

Both Sincere Navigation and Taiwan Navigation are the latest owners to be linked with an ordering splash.

Both Taipei-listed companies have said in their respective shareholder meetings that the time is now good to enlarge their fleets, without detailing a specific action plan.

Taiwan Navigation is contemplating buy 10 bulkers of varying size before year end to take its fleet to 25 ships. The order could include capesizes, something not in the current fleet line up.

Sincere Navigation, meanwhile, is looking at an unspecified number of kamsarmaxes.

Taiwan’s owners are almost all taking advantage of low newbuild prices this year.

U-Ming Marine Transport got the ball rolling when it signed a deal to purchase four capesizes with an option for six more in February at a price of US$47.5m a unit.

Evergreen, which had held out for so long from the super post panamax rush in container shipping, has now secured Korean financing a for a series of 13,800 teu ships to be built at just $115m a piece, while Yang Ming has just earmarked $540m for a series of 14,000 teu ships.

“Taiwanese owners are very canny,” one Hong Kong shipbroker told SinoShip News, “They tend to hold out till right near the bottom of the newbuild price cycle.”

Not quite everyone is so sure however. C C Hsu, boss of both Courage Marine and Eddie Steamship, told SinoShip News that there is still room for prices to fall and that yards would have to accept more pain before he was tempted to put pen to paper.  [27/06/12]

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