Yangzijiang Shipbuilding (Holdings)

[corydorus]

Just curious.

With the over abundance of ship (supply). Why the company still want to order to build new ships ?
Will be interesting to know more on the terms and conditions.

[desmondxyz]

Just curious.

With the over abundance of ship (supply). Why the company still want to order to build new ships ?
Will be interesting to know more on the terms and conditions.

With the oversupply of oil, OPEC still keep pumping oil. Do we need terms and conditions here?

[Greenrookie]

Just curious.

With the over abundance of ship (supply). Why the company still want to order to build new ships ?
Will be interesting to know more on the terms and conditions.

With the oversupply of oil, OPEC still keep pumping oil. Do we need terms and conditions here?

They ordered containers, not tankers lei

[desmondxyz]

Just curious.

With the over abundance of ship (supply). Why the company still want to order to build new ships ?
Will be interesting to know more on the terms and conditions.

With the oversupply of oil, OPEC still keep pumping oil. Do we need terms and conditions here?

They ordered containers, not tankers lei

What I mean is business is business, you don't expect supplier to cease supply even though there is an oversupply. So what so surprise the company ordered new containerships? 

[shadow_walker]

Just curious.

With the over abundance of ship (supply). Why the company still want to order to build new ships ?
Will be interesting to know more on the terms and conditions.

Both the container ships and bulk carriers are in a bad shape.

One reason why the Chinese shipbuilders are still receiving orders is the Chinese policies of subsidizing new shipbuilding.

The government is subsidizing Chinese shipowners to scrap their bulk carriers for RMB 1,500 per gross registered ton. 50% will be received on completion of scrapping and another 50% when a new ship is ordered from the Chinese shipyard. Cosco pacific receives substantial other income from scrapping for 2015.

This policy will end in 2017 and might distort competition and recoveries in the future.

Nowadays it is common for ships to be scrapped at 20 years old with the subsidies to scrap and order new-built at Chinese yard

[corydorus]

Just curious.

With the over abundance of ship (supply). Why the company still want to order to build new ships ?
Will be interesting to know more on the terms and conditions.

With the oversupply of oil, OPEC still keep pumping oil. Do we need terms and conditions here?

They ordered containers, not tankers lei

What I mean is business is business, you don't expect supplier to cease supply even though there is an oversupply. So what so surprise the company ordered new containerships? 

I think that depends whether there are too many builders or supply ships or both. Cosco stock price tank like nothing so even with subsidy it doesn't look good to be in this business for builders.

[Greenrookie]

Just curious.

With the over abundance of ship (supply). Why the company still want to order to build new ships ?
Will be interesting to know more on the terms and conditions.

With the oversupply of oil, OPEC still keep pumping oil. Do we need terms and conditions here?

They ordered containers, not tankers lei

What I mean is business is business, you don't expect supplier to cease supply even though there is an oversupply. So what so surprise the company ordered new containerships? 

I think that depends whether there are too many builders or supply ships or both. Cosco stock price tank like nothing so even with subsidy it doesn't look good to be in this business for builders.

My trail of thoughts is simplier, recent orders for containers are for mega ships (10k Teu and above?)
, but the transhipping might need smaller ships of those less yhan4 K teu？

[CY09]

Not sure if it has been posted here.

Often many new orders for large ships occur due to the operational efficiency of the newer model of ships. This is why many large shipping liners (which happen to be national backed carriers) have to keep upgrading their fleet to ensure the lowest op cost structure. It is similar to the airline model where they have to constantly order new airbus/Boeing.

With the constant addition of supply, freight rates are going to remain low and this means many national backed carriers will be financially tested. Singapore's NOL has thrown in the towel despite the govt's valiant effort to help it. One of this was allowing NOL to sell its freehold HQ to private sector instead and the massive rights issue in 2009. We have seen Korea Development Bank (the DBS of Korea) thrown in the towel by not backing Hanjin its largest carrier.

All this will lead to a decrease of shipbuilding orders. However, it will not lead to a complete stop of ship orders due to the reason stated in para 1. For me, I foresee more national carriers will throw in the towel due to the dilemma of having to increase CAPEX to gain a low cost structure advantage in a low freight rate environment. In Asia, it is likely NYK,, Hyundai and Evergreen will be left standing with maybe Cosco in the limbo. Half a decade more of this game to come.

In the meantime, YZJ will be lucky as orders will still flow in for the newer model of ships. However, in the long run, it is likely to face price pressure when there are less shipping carriers as the latter will have a pricing power; unless of course the shipbuilding undergoes their own consolidation where only four to five names exist in Asia.

[brattzz]

supply and demand, BIG fish eats SMALL fishes...

Who can last longer, WINS!!!

[touzi]

Not sure if it has been posted here.

Often many new orders for large ships occur due to the operational efficiency of the newer model of ships. This is why many large shipping liners (which happen to be national backed carriers) have to keep upgrading their fleet to ensure the lowest op cost structure. It is similar to the airline model where they have to constantly order new airbus/Boeing.

With the constant addition of supply, freight rates are going to remain low and this means many national backed carriers will be financially tested. Singapore's NOL has thrown in the towel despite the govt's valiant effort to help it. One of this was allowing NOL to sell its freehold HQ to private sector instead and the massive rights issue in 2009. We have seen Korea Development Bank (the DBS of Korea) thrown in the towel by not backing Hanjin its largest carrier.

All this will lead to a decrease of shipbuilding orders. However, it will not lead to a complete stop of ship orders due to the reason stated in para 1. For me, I foresee more national carriers will throw in the towel due to the dilemma of having to increase CAPEX to gain a low cost structure advantage in a low freight rate environment. In Asia, it is likely NYK,, Hyundai and Evergreen will be left standing with maybe Cosco in the limbo. Half a decade more of this game to come.

In the meantime, YZJ will be lucky as orders will still flow in for the newer model of ships. However, in the long run, it is likely to face price pressure when there are less shipping carriers as the latter will have a pricing power; unless of course the shipbuilding undergoes their own consolidation where only four to five names exist in Asia.

Hanjin's collapse is supposed to result in increase in freight rate. Wouldn't that spur the liners to invest?