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Optimistic about the shipping market, SITC International orders 7 new ships, and ONE adds 8 new ships for charter

▍SITC International orders new ships to expand fleet

SITC International Holdings, an Asian regional shipping company, ordered 7 new ships from Yangzijiang Shipyard, with a total value of US$180 million.

On November 30, SITC stated in a document submitted to the Hong Kong Stock Exchange that after the first order of 6 ships in August, it had exercised the option of two 1,800TEU ships with a total price of US$42 million. SITC can still choose to add four more similar ships.

In addition, SITC placed additional orders at the same shipyard, including one 2,700TEU and four 2,400TEU container ships, with a total price of US$138 million.

The delivery time is scheduled from October 2021 to September 2022 and will be constructed by the two sub-shipyards of Yangzijiang, Jiangsu Yangzijiang Shipyard and Jiangsu New Yangzi Shipyard.

SITC said that as chartering costs increase, it will expand the scale of its own fleet.

SITC has also expanded its fleet by purchasing second-hand ships, as the company has opened up more regional routes in Asia to meet peak season demand. In August, SITC purchased 2,700TEU SITC Chulai (formerly Bomar Aurora) built in 2005 for US$6 million.

Although the Covid-19 pandemic has caused market uncertainty, SITC believes that the Asian internal trade market will continue to achieve significant growth.

As of June 30, the group operated 70 trade routes, of which 9 were operated through joint services and 27 trade routes were operated through space exchange. These services and the onshore integrated logistics business network cover 72 major ports in Asia.

▍ONE expands its fleet and adds 8 leased ships

The improvement of the industry has prompted ONE to add 8 new large-scale charter vessels to the total fleet.

ONE CEO Jeremy Nixon said that since freight rates picked up this summer and peaked in September and October, the Singapore-based shipping company not only enjoyed incredible overall benefits, but by mid-November. The freight rate has not changed.

 We still have ambitions to expand the fleet, but we have not yet made a decision. "
Ocean Express CEO Jeremy Nixon (JEREMY NIXON)
Throughout 2020-21, its fleet will add eight large ships, five of which have already been leased, and the other three will be added soon.

Nixon explained that ONE's ambition to build a giant ship has not been put on hold.

"We still have ambitions to expand our fleet, but we have not yet made a decision. We do not yet know which ship, which fuel and which shipyard will be used. Once an agreement is reached, we will order new ships, but these ships may require You won’t be able to enter the fleet until 2024.” He said.

The strong development from the third quarter to the fourth quarter surprised Nixon. He said that October usually means a weakening of shipping, but not in 2020.

In the second quarter, the utilization rate of Eastbound Asia-North America reached nearly 100%, maintaining the highest level in history.

Nixon said that between October and November, the deployment of ships and container equipment has reached the largest scale, and the industry is enjoying a strong momentum that has not been experienced in years. But no one can really predict whether this favorable market situation will continue and how long it will last.

"It is impossible to predict what will happen after February or March. At present, there are many bookings for the next two months. Unfortunately, the shortage of containers will continue until the Lunar New Year." Nixon said.

ONE achieved a profit of US$682 million in the first half of this year from April to September, compared with a profit of US$126 million in the same period last year. ONE expects full-year profit of 928 million US dollars.