[061114.EN.SEA] New Containership Orders Breach Million TEU Mark

ORDERS for containerships have passed the one million TEU mark this year, with 145 units contracted during the first 10 months, says Alphaliner.

Based on nominal container intake, the cellular containership orderbook currently stands at 3.5 million TEU, representing 19.3 per cent of the existing fleet, which totals 18.2 million TEU.

The present orderbook-to-fleet ratio, at below the 20 per cent mark, stands at one of the lowest levels since 2000, compared with peaks of 60 per cent in 2005 and 2008.

The ratio could however rise again by a few points, if the G6 carriers were to conclude orders for a series of 18,000-TEU ships believed to be in the pipeline.

On the other end of the spectrum, renewed interest for containerships of 1,000-2,000 TEU could trigger further orders in this size range with 49 units contracted so far this year.

Most of the orders in this segment are focussed on the intra-Asia trades, mainly the 1,000-1,100 TEU size for North Asia routes and the 1,600-1,700 TEU size for southeast Asia trade lanes.

Ordered at attractive prices, many of these fuel-efficient ships designed for operation in intra-Asia niche trades will displace old charter tonnage. A few ships of 1,400-2,400 TEU designed for the Baltic trades were also ordered.

The overcrowded mid-sized vessel segment is being shunned, and orders for ships in the 3,000-7,500 TEU size range have been scarce in the past two years, with few exceptions.

US private equity owner Oaktree ordered 10 wide beam container vessels of 5,370 TEU at Hanjin's Subic Bay yard, with half of the ships delivered so far.

Germany's Niederelbe Schiffahrt (NSB) this year contracted four 5,000-TEU ships at Sainty Shipyard, and Simatech in 2013 committed to two 4,350-TEU ships from Taizhou Catic.

With 100 neo-panamax wide beam ships of 8,500-10,000 TEU scheduled for delivery in the next two years, the mid-sized segment also faces significant pressure from above, as these new ships will mainly replace 4,000-7,000 TEU vessels, which could then have limited prospects for re-employment.

In terms of orders, the 8,500-10,000 TEU handy neo-panamax, which refers to ships with a 19-row beam and an overall length of 299 to 335 metres, was the most popular segment last year.

A total of 78 such units were signed for in 2013, with a further 15 orders added in the first two months of 2014. By unit count, the segment accounted for 23 per cent of all new containership orders since 2000.

But reduced demand on Latin America and Black Sea routes, trades for which these ships are optimised, has put pressure on this sector too. Subsequently, there have not been any further orders for ships of this size since March.

In contrast, the ultra large containership (ULCS) sector continues to attract interest, with orders for three 18,000-TEU-class ships announced last week for an undisclosed European owner.

Additional deals for ships of this size are expected to be concluded in the next few months as several carriers are currently considering ULCS newbuilding programmes.

Source : HKSG.