Taiwan-listed Wan Hai Lines is scaling down its spending on new ships.
Industry sources said the liner company has elected to not exercise optional vessels it held at Japan Marine United.
Last November, Wan Hai signed a newbuilding deal with the Japanese shipyard for up to eight 3,036-teu containerships at $41.4m each, to be delivered in the second half of next year. The contract was for four firm vessels plus four options.
Wan Hai has until 12 May to exercise the options, but industry sources said the company has already decided against it.
One containership player is not surprised by Wan Hai's decision.
'Market not healthy'
"The containership market is still not healthy. The market is not good enough to cover the cost of building a new ship and the financing costs," the source said.
"Companies that invested on feeder containerships in the last 10 years have not been making much money. These are good ships but the charter market is not improving, simply due to excess supply of vessels."
Last month, Wan Hai dropped four 2,038-teu options at China’s Huangpu Wenchong Shipbuilding.
The options were part of a 16-ship order placed last year. Wan Hai was reported to be paying $26.3m apiece for the feeder vessels and slated to take delivery in 2021 and 2022.
The company ordered the 2,038-teu and 3,036-teu newbuildings as part of its fleet-renewal programme.
Wan Hai recently announced that its net earnings for last year dropped to TWD 1.13bn ($36.63m), compared with TWD 2.55bn in 2017.
Revenue rose to TWD 66.77bn from TWD 60.76bn year on year.
But total operating expenses were higher at TWD 61.77bn, against TWD 53.65bn in 2017.
