Bruce Barnard | May 26, 2010 2:59PM EDT
LONDON – A European shipowner canceled an order for three container ships because it could not finance the $300 million contract with a South Korean shipyard.
The Hanjin shipbuilding company said the unidentified owner had agreed to forfeit the deposit on the vessels which were part of an order for five container ships placed in 2007.
This is the latest in a growing number of cancellations by cash-strapped ocean carriers and owners who can’t meet installment payments on orders placed at the height of the container shipping bull market.
French ocean carrier CMA CGM recently canceled orders for 12 ships, including two 12,600 twenty-foot equivalent units vessels contracted with Hanjin. Rickmers Maritime, the Singapore-based affiliate of Germany’s Rickmers Group, canceled contracts for four 13,100 TEUs ships and three 4,250 TEUs vessels.
Shipyards are holding on to some 30 ships with a combined capacity of 270,000 TEUs until their owners resolve financing issues, according to Alphaliner, the Paris-based research consultant.
Danaos, the NYSE-listed container ship charter owner, has said it facing “significant” new building installment payments during 2010 and 2011 for which it has not yet finalized financing.
While charter owners are seeking to cancel orders, some ocean carriers could start ordering ships within a year, driven by a rapidly shrinking order book and an improving global trade outlook, according to Alphaliner.
The order book has been shrinking for 22 consecutive months since July 2008 in the industry’s longest slump, but there could be a return to “major” new orders by the first quarter of 2011.
--Bruce Barnard can be reached at brucebarnard47@hotmail.com.