In Dry Bulk Market,International Shipping News 04/05/2015
Taiwan’s major bulk shippers are sticking with their fleet upgrade strategies — aimed at long-term profitability — shrugging off negative sentiment in the bulk shipping industry this year, which they see as a short-term headwind, company executives said.
U-Ming Marine Transport Corp, which is part of the Far Eastern Group, on Thursday announced it would take delivery of a capesize bulk carrier built by Shanghai Waigaoqiao Shipbuilding Co.
It is the ninth vessel of the 12-ship order U-Ming placed to the Chinese shipbuilder in 2012 — aimed at reinvigorating its fleet and improving energy efficiency.
“Although the bulk shipping industry is still facing challenges this year, U-Ming is maintaining its strategy of ordering ships during turbulent periods in the industry which enables it to negotiate a better price,” the company said in a statement.
U-Ming has added 16 new bulk vessels and eliminated eight old ones since 2012, with another eight new ships due to join the fleet by the end of 2017, aimed at raising the company’s cost efficiency and profitability.
The company saw consolidated sales in the first quarter decline 10.32 percent from the same period last year to NT$1.9 billion (US$61.78 million), stock exchange data show.
Wisdom Marine Group, the other major bulk shipper in Taiwan, is maintaining a similar strategy during a challenging time for the industry.
Wisdom Marine, which has a fleet of 104 vessels, plans to take delivery of five new ships over the rest of the year, with the company already having signed long-term contracts to lease the ships to major global charterers to ensure profitability.
Wisdom Marine posted pre-tax profits of NT$532.95 million, or NT$1.1 per share, in the first quarter of the year, down 11.11 percent from the same period a year earlier, the company said in a statement.
However, according to Capital Investment Management, the oversupply issue might continue to be the bulk shipping industry’s major uncertainty this year, with weak demand from China also dragging down the Baltic Dry Index (BDI) — which tracks the costs of transporting dry commodities such as coal, iron ore and grain across 20 shipping routes.
The BDI dropped 0.68 percent to close at 587 points on Friday, with the index already showing a 24.94 percent decline for this year, an indication that low prices might continue to impact major global bulk shippers’ business this year, Capital Investment added.
