Chellaram Shipping, one of Hong Kong's largest independent shipowners, is looking to further expand its fleet of dry cargo ships despite concerns about the challenges facing the dry bulk sector. The company, controlled by founder Lal Chellaram, has recently taken delivery of two large dry cargo ships and a third will join the fleet this month.
Vishal Khurana, the firm's director and chief executive, said: 'We consistently look at opportunities both in the newbuilding sector and the modern secondhand tonnage as a prudent way forward to rejuvenate and keep our fleet young'. The firm owns 11 dry cargo ships for transporting coal, grain and other dry bulk commodities, and two dredgers. Khurana said the average age of its dry cargo fleet was under 3.5 years.
Shipping experts believe the price of new vessels and secondhand tonnage has hit the bottom following dramatic falls since the start of the shipping downturn in 2008.
Russell Beardmore, head of shipping finance in North East Asia for Standard Chartered Bank (Hong Kong), said: 'Secondhand and newbuilding prices have come down. We are seeing new ships that were selling at more than US$100 million four or five years ago down to US$40 million at current market values'.
Analysts said rising labour costs and raw material prices in China and South Korea meant there was a limit to how much shipyards could keep discounting.
Chellaram Shipping agreed to pay US$36 million according to brokers when it ordered the Darya Kirthi, an 80,500 deadweight tonne (dwt) Kamsarmax ship, from South Korean shipbuilder STX in April 2010. The ship, which was a sister vessel to two ships delivered to Chellaram by STX in 2010, is on its maiden voyage to the United States to load a cargo of grain. By comparison, Clarkson said the current price of a similar sized ship ordered now from the same shipyard was US$33 million. Two smaller 36,500-dwt Handysize vessels, Darya Ganga and Darya Jamuna, are also joining the Chellaram fleet.