Yang Ming‘s shipbuilding plan has finally been finalized. This time, it plans to bid for the construction of five LNG-powered container ships worldwide. Among the top ten container shipping companies in the world, Yang Ming is also the only shipowner that has not placed an order for shipbuilding in the past year. After the unprecedented wave of orders last year, the price of container ships has risen. The order value may hit a new “sky price” of $1 billion.
On April 15, Yang Ming issued a new announcement saying that the board of directors agreed to build five 15,000TEU dual-fuel LNG-powered container ships, which will be purchased through international bidding, becoming the first container shipping company in Taiwan to build LNG-powered container ships.
Previously, Yang Ming had announced on January 14 that it would build five 15,000TU container ships, but it was not confirmed at that time that it would order LNG-powered ships. Yang Ming said that the ordering is to meet the needs of the mid-to-long-term development of future operations such as European and American lines and the need for fleet replacement and replacement. It is expected that these new ships will be delivered in 2025.
It is understood that Yang Ming has been researching and building LNG-powered ships for a long time. In December last year, it proposed to build 12 15,800 TEU dual-fuel container ships, but it was not approved by the board of directors. This time, it is determined that LNG-powered ships will be ordered. It is estimated that the cost of each ship is 20-30 million US dollars higher than that at the end of last year, from nearly 170 million US dollars last year to nearly 200 million US dollars.
For comparison, Clarksons data shows that Zoidac Maritime ordered six 15,600TEU dual-fuel container ships at Daewoo Shipbuilding in South Korea in January this year, at a cost of $182.8 million each.
In recent years, LNG power has become a popular fuel choice in the container ship market. LNG-powered containership orders have increased fivefold since January 2020, with more than half of the VLCC orders on hand being LNG-powered or LNG-ready designs.
According to Clarksons, about 30 percent of new orders for all of last year were for LNG-powered dual-fuel vessels. In the first quarter of this year, about 57% of new ship orders were powered by LNG, including 10% in both LNG-powered and ammonia-ready designs. By the end of this year, 170 ports around the world will be able to provide LNG bunkering services.
Industry insiders pointed out that LNG-powered ships are currently the best choice for reducing carbon emissions. Although there is a problem of methane slippage, the industry has begun to use biomass fuel to improve it. Before the development of low-carbon fuel engine technologies such as ammonia and hydrogen is mature, LNG is still the mainstream ship type.
For Yang Ming, ordering new ships to expand its fleet is indeed imminent. It is understood that among the top ten container shipping companies in the world, only Yang Ming has not placed an order for ships in the past year, the current orders are less than 100,000 TEU, and no new ships will be delivered after 2023.
In addition to five 15,000 TEU container ships, Yang Ming plans to build 1,200-1,800 TEU ships in the next stage to meet RCEP business opportunities and the needs for inter-barge transportation in Southeast Asia. General Manager Du Shuqin previously stated that the company will match the expiry time of the existing ship leases to ensure the establishment of a fleet of appropriate size to serve customers and stabilize its market position. Shipbuilding will complete the plan according to its own needs.
According to Alphaliner data, Yang Ming currently operates 92 container ships, including 50 self-owned and 42 leased ships, with a total capacity of about 664,300 TEU, ranking 9th in the world. The member company with the least capacity in China. In addition, Yang Ming has orders for a total of 5 ships of 59,300TEU, accounting for only 8.9% of its existing fleet.
Although the current capacity ranking is temporarily ranked 9th, Yang Ming holds orders far below the 10th-ranked ZIM (46 ships about 393,600 TEU), and the 11th-ranked Wan Hai (44 ships about 313,200 TEU). In addition to the orders in hand, ZIM’s fleet capacity is much higher than that of Yang Ming, and the fleet size of Wan Hai is almost the same as that of Yang Ming. These two companies have been active in the new shipbuilding market since last year.