Tensions with China have prompted Taiwanese liner giant Yang Ming Marine Transport to opt for South Korea’s Hyundai Heavy Industries to build a series of 15,000-teu container ships instead of Yangzijiang Shipbuilding, TradeWinds understands.
The move comes amid reports that shipowners have been spooked by China’s ambitions for Taiwan and Beijing’s ever-closer relationship with Moscow, leading them to seek break clauses in contracts with Chinese firms that would allow them to walk away in the face of any future sanctions on the country.
Last week, Yang Ming disclosed that it had received approval from the board to order the five large LNG dual-fuelled boxships, but did not name the shipbuilder.
A Yang Ming executive said: “The procurement [of the container ship newbuildings] is still in process and the company is unable to disclose any information at this moment. The counterparty and price will be announced according to the provisions after signing the contract.”
It said the order, which is expected to cost between $850m to $975m, is in line with the company’s global fleet deployment plan and its goal of achieving net zero emissions.
“With these new ships, Yang Ming will be able to optimise its fleet allocation, enhance the fleet’s overall competition, and operate more sustainably and environmentally friendly by reducing energy consumption and carbon emission.”
Shipbuilding sources told TradeWinds that Yang Ming did not reveal HHI as the shipyard behind the order as it may still be in the process of finalising shipbuilding clauses.
“We think the political tensions between China and Taiwan have led Yang Ming to pick HHI instead of Yangzijiang,” a shipbuilding observer said.
About six or seven shipbuilders were reported to have taken part in the tender that was floated in August last year.
They included Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering, Jiangnan Shipyard and Nippon Shipyard, a joint venture between Imabari Shipbuilding and Japan Marine United.
In February, the company was reported to have shortlisted HHI and Yangzijiang.
Yang Ming is one of the partners in THE Alliance — which involves Hapag-Lloyd, Ocean Network Express and South Korea’s HMM. The Taiwanese liner operator is said to be the only member in THE Alliance to have not ordered dual-fuelled ships.
Yang Ming reported that its consolidated revenues for the first quarter of 2023 amounted to TWD 36.95bn ($1.22bn). The net profit after tax was at TWD 3.4bn ($112m) with an earnings per share of TWD 0.97.
“The demand in the global market registered a downward incline because of the ongoing war between Ukraine and Russia, the consecutive imposition of interest rate hikes by the US Federal Reserve and the current status of customer inventory, all of which stalled global economic recovery,” Yang Ming said.
“The maritime transport market in Q1 suffered delayed shipping and operational constraints due to the Lunar New Year holiday, factories adjusting shipping schedules and manpower allocation driven by market demand.
“As a result, the revenues were reduced for the entire quarter. As different sectors gradually resumed business in March, there was a slight increase in the overall operation volume and the operation remained positive in Q1.”
Officials at HHI declined to comment on the shipyard’s newbuilding activities, citing contract confidentiality.
