Sinotrans to invest in newbuildings

Chinese shipowner Sinotrans Shipping Ltd said it would invest a total of $388 million in new ships over the next three years in anticipation of a better outlook for 2009. “Given the improving market sentiment, the company has no plan to further delay or cancel its orders,” Tian Zhongshan, executive director and general manager said.

The Baltic Exchange’s main sea freight index plunged more than 90 % in 2008 before a gradual recovery kicked in during February with the index back to 2,262 points recently.

The Hong Kong-listed shipping group said it would take delivery of 10 new ships from the end of 2009 to 2011 and would spend $163.3 million in 2009, $211.2 million in 2010 and a preliminary $13.7 million in 2011 on the newbuildings. Total capacity of the fleet will rise to 3.3 million dwt by 2011 from 1.7 million dwt at the end of 2008.

“The dry bulk shipping industry has been improving since the beginning of this year, especially after the Chinese New Year,” Tian said. Sinotrans weathered a market downturn and managed to post 13.6 % year-on-year growth in charter hire income in the fourth quarter.