Plummeting profits and an over-supplied container market are not stopping Asian liner giant Ocean Network Express from placing new vessel orders.
Shipbuilding sources say the Singapore-headquartered company, known as ONE, has selected two shipyards in China to build a series of methanol dual-fuel 13,000-teu neo-panamax boxships worth close to $2bn.
ONE is said to have contracted state-owned Jiangnan Shipyard and Singapore-listed Yangzijiang Shipbuilding to build six each.
Jiangnan and Yangzijiang officials were not available for comment. ONE did not respond to emails seeking confirmation.
News of ONE’s plan was first reported in TradeWinds in September.
Then, the liner company was said to have asked Far East shipyards for offers to build between five and 10 ships, with options for an additional five vessels.
One shipping source said ONE needs to grow its own fleet as it does not have any owned vessels trading, although it has 20 methanol and ammonia-ready newbuildings contracted — 15 at Ninhon Shipbuilding in Japan and five at HD Hyundai Heavy Industries.
In October, Alphaliner said at least 187 vessels had been added to the global orderbook in the first nine months of the year despite a waning market. It added most had been contracted by carriers rather than tonnage providers.
Alphaliner said two reasons driving orders were that carriers still have enormous cash reserves from the pandemic and their desire to decarbonise their fleets.
Green ships constitute 83% of the capacity ordered so far in 2023, with methanol-powered ships accounting for 52% of capacity ordered, and LNG-powered newbuildings at 31%.
Sources said major shipyards such as HHI, Samsung Heavy Industries, Nihon, Yangzijiang and Jiangnan participated in ONE’s newbuildings bid.
Competitive pricing
They added that the liner company has selected Jiangnan and Yangzijiang because of their price competitiveness.
Brokers said South Korean shipyards were seeking at least $180m per ship, while the price offered by the Chinese shipyards was 15% to 20% lower.
Shipbuilding sources said Jiangnan and Yangzijiang are sitting on huge orderbooks and believed the two shipbuilders would only be able to deliver ONE’s newbuildings between late 2026 and 2027.
ONE is a member of The Alliance with partners Hapag-Lloyd, HMM and Yang Ming Marine Transport.
The company saw profits fall by 97% in the second quarter of the current fiscal year on the back of weak demand and stagnant freight rates.
Net profit sank to $187m in the period from July to September, down from $5.5bn in the same period last year.
Its revenues were down by 62% to $3.5bn compared with the corresponding period. However, it expects a gradual recovery in the second half.
