Seaspan Corp. (SSW)

[eastunder]

Seaspan May Buy 15 More Ships as Prices Hit 4-Year Low

By Jasmine Wang & Kyunghee Park - Jan 29, 2013 9:00 AM MT.

http://www.bloomberg.com/news/2013-01-29/seaspan-may-buy-15-more-ships-as-prices-hit-4-year-low.html?cmpid=yhoo

Ship prices have dropped because of industrywide losses, overcapacity and tighter financing caused by European banks paring lending. The price of a vessel that can carry as many as 13,500 20-foot containers was worth $107 million last month, according to Clarkson Plc (CKN), the world’s biggest shipbroker. That is the lowest since it started compiling the data in June 2008.

“We are happy with the price level right now,” Wang said. “We hope to capitalize on the situation. I have no reason to say the market will go down further.”

The new vessels that the Hong Kong-based company plans to order will be able to carry at least 10,000 20-foot-boxes each, he said. Seaspan has agreed to charter five 14,000-box vessels to Taiwan’s Yang Ming Marine Transport Corp. (2609), Wang said. The ships, to be built by Hyundai Heavy Industries Co. (009540), will be delivered from 2015.

Biggest Vessel

Yang Ming is following other lines in ordering more fuel- efficient vessels as A.P. Moeller-Maersk A/S will take delivery in June the world’s biggest container vessel that will consume about 35 percent less fuel per box than those currently in service.

“There’s always demand for modern ships and for fuel- efficient ships,” Wang said. “Operators are getting more confident, and I will see more older ships being phased out.”

The price of 380 centistoke bunker fuel used by ships has jumped about 13 percent in two years, according to data compiled by Bloomberg.

The average age of Seaspan’s fleet is about four years old, compared with the industry average of 11-years, Wang said. The company has 69 ships on its fleet, according to its website.

Trade between Asia and the U.S. was stronger in last 12 months as China continues to expand and the U.S. is on a “solid” path of recovery, Wang said.

Chinese industrial companies’ profit rose 17.3 percent in December, adding to signs the world’s second-largest economy’s rebound is gaining momentum. Industrial profits may rise by an average 30 percent this year as China recovers from a seven- quarter slowdown, businesses start restocking and export demand improves, Standard Chartered Plc forecasts.

Seaspan’s parent Tiger, Carlyle Group LP (CG) and other investors formed a ship fund in 2011 with the goal of buying $5 billion in assets as container lines add new vessels to counter rising fuel costs. Tiger also owns bulk ships, chemical carriers and heavy-lift vessel through units including Seaspan and Greathorse Shipping.

To contact the reporter on this story: Jasmine Wang in Hong Kong at [e-mail] Kyunghee Park in Singapore at [e-mail];