Neptune Orient Orders $1.2 Billion of Container Vessels as Trade Rebounds
Neptune Orient Lines Ltd., owner of Asia’s largest container shipping line, signed a $1.2 billion order for as many as 12 container vessels as a rebounding global economy revives world trade.
Daewoo Shipbuilding & Marine Engineering Co., the world’s second-largest shipbuilder, will build 10 of the vessels able to carry as many as 8,400 20-foot standard containers, Neptune Orient said in a Singapore stock exchange statement late yesterday. The shipyard may also construct two other ships with a capacity of 10,700 boxes apiece, it said.
Neptune Orient follows Evergreen Group in ordering ships, as container lines take advantage of lower vessel prices caused by a two-year slump in orders to renew their fleets amid a pick- up in traffic. Singapore-based Neptune Orient’s container volumes have risen 39 percent this year through June 25 as U.S. and European retailers order more goods from Asia.
“There couldn’t be a better time for financially stable companies to invest,” said Cho In Karp, head of research at Heungkuk Securities Co. in Seoul. “Shipping lines will pay a lot less for new vessels if they order now rather than waiting.”
The 10 confirmed ships will be delivered to Neptune Orient’s APL Ltd. unit in the 2013 and 2014, the company said. The vessels will replace chartered-in ships and expand the fleet.
Neptune Orient gained as much as 1 percent to S$2 and traded at S$1.99 as of 10:11 a.m. in Singapore. The stock has climbed 21 percent this year, the sixth-best performer on the island-city’s Straits Times Index.
The company last signed contracts for new vessels in June 2007, when it ordered eight 10,000-container ships from yards including Daewoo.
The order was Daewoo’s first for container vessels in about two years. The shipyard today gained as much as 3.3 percent to 20,350 won, the highest intraday price in more than two months, and traded at 20,100 won as of 11:14 a.m. in Seoul.
Evergreen ordered 10 container vessels from Samsung Heavy, the world’s No. 3 shipyard, in a $1 billion deal earlier this month.
A vessel able to carry 8,200 containers was worth $88 million at the end of June, 8.3 percent lower than a year earlier, according to Clarkson Plc, the world’s largest ship broker.