South Korean feeder operators Namsung Shipping, its subsidiary Dong Young Shipping, as well as Dongjin Shipping, are jointly ordering three 1,600TEU ships from Hyundai Mipo Dockyard.
Both sides came together as the shipbuilder offered a bulk discount for ordering a few vessels. Delivery of the ships, priced at US$25 million each, is expected in H2 2023. Dongjin expects to take delivery of one ship in September 2023, while Namsung and Dong Young will take delivery of the other two ships in November and December 2023.
[s2If is_user_logged_in()]The recent rebound in container freight rates brought record earnings to liner operators, and tight market capacity is encouraging owners to commission newbuildings.
Namsung and Dong Young plan to obtain government newbuilding subsidies by selling two 962TEU ships, the 2005-built Pegasus Zetta and the 2006-built Star Apex. The subsidies and the establishment of KOBC are part of a host of stimulus measures launched in 2017 when President Moon Jae-in’s government spearheaded the revival of the maritime industry.
The subsidies, amounting to 10% of the shipbuilding costs, are given to shipping companies for building eco-friendly vessels if old ships are scrapped or sold to non-South Korean buyers. Namsung has previously received such subsidies when the company ordered four 1,000TEU ships in recent years.
South Korean shipping companies have been using policy lenders to finance ships. In particular, Namsung and Dong Young have a policy of obtaining senior debt from policy banks and using the Korea Ocean Business Corporation, a state-backed ship finance provider, as a junior lender.
Namsung said, “Both 1,800TEU and 1,600TEU ships have nominal capacities of 1,300TEU but we decided on the 1,600TEU design due to the competitive pricing and fuel economy.”
Martina Li
Asia Correspondent
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