Seaspan orders another five ships of 14,000 teu at Hyundai Heavy Industries

Seaspan Corporation on Monday confirmed the placement of orders for a series of five container vessels at ‘a major Asian shipbuilder’. The Hong Kong and Vancouver-based non-operating owner and ship financier did neither disclose the vessel size nor the shipyard, but the orders are believed to be for 14,000 teu vessels, placed at Hyundai Heavy Industries of South Korea.

Seaspan stated in its most recent quarterly financial report that the orders were signed on 19 July and that the vessels were scheduled for delivery in 2015. The deal is worth USD 550 million in total or USD 110 per vessel. The company said that it expected to sign long-term time charters with one of the liner majors shortly.

The five ships are believed to be conversions of options that Seaspan originally placed for long-term charter to Yang Ming. Though unconfirmed, the scenario might look like this:

At the beginning of this year, Seaspan placed firm orders for five 14,000 teu container vessels at Hyundai Heavy Industries. At the same time, Seaspan signed options for a further five units of similar design. Reportedly, these ships were also slated for Yang Ming. It is however believed that the Taiwanese carrier did not want to commit to long-term charters for ten ultra-large ships unless it could sub-charter five of these out to one of its alliance partners in a deal similar to the recent arrangements between OOCL and NYK as well as APL and MOL (with the difference that OOCL and APL are owners of the ships, not charterers).

Initially, it was believed that K-Line would follow its two compatriots and agree to such an arrangement. The Japanese carrier however decided otherwise in March and ordered five 13,900 teu ships at the Imabari Group’s Koyo Dockyard. K-Line therefore became the first Japanese shipping line to order ships of this size class and Koyo became the first Japanese yard to receive orders for ULCS.

Seaspan was thus left with five options for 14,000 teu vessels without a long-term charter commitment. It is believed that, to take advantage of the present low newbuilding prices, Seaspan decided to hold on to these options and eventually convert them – either as speculative orders, or with the backing of a new long-term charterer.

The company’s release on Monday indicated that the orders were finally placed without a firm charter contract in place. Seaspan’s wording however suggests that the company is in negotiations to sign such deals shortly. One potential candidate for this is UASC, which earlier this year announced intentions to order a series of 14,000 teu ships as well as a series of 18,000 teu ships, earmarked for joint services with CSCL, which also placed jumbo ship orders.

While the above is only speculative for the time being, it seems likely that details of the recent vessel orders will become available in the coming weeks.

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