SCI to place newbuilding orders

“I can’t reveal the price and name of the yard as I am yet to sign the contract,” said S. Hajara, SCI chairman and managing director. “The purchase of these five vessels and four Kamsarmax bulk carriers that we had already placed would be funded through our follow-on offer.”

In late September, SCI signed an agreement with Jiangsu Eastern Heavy Industries of China for four Kamsarmax bulk carriers of around 80,000 dwt. According to a local report, the average age of SCI’s fleet is expected to come down to 11 years from the present 18 years as new vessels join its fleet and older ones are sold or scrapped over the next two years.

SCI will place a second round of orders for the remaining capacity under the 11th plan outlay during FY11-12, and will be floating fresh global tenders. Prices of shipping assets have corrected significantly over the last year due to the general weakness in freight rates. New build as well as five-year-old vessel prices are trading at a discount of 15-30% compared to prices at the peak in 2007-08.