Anchor Ship Investment Co., Japan’s largest ship-fund manager, may more than double its fleet to as many as 50 vessels because of rising imports of coal and iron ore in China and India, Bloomberg reports.“Our customers are asking for more bulk carriers to feed that demand and we are filling it,” President Hajime Tsuji said in an interview at the company’s head office in Tokyo yesterday. Anchor Ship will use its second fund of about 200 billion yen ($2.6 billion) to add to the 24 vessels it currently owns or has on order, he said.
The company’s first fund has posted annual returns of more than 5 percent since its formation in 2007 as signing more than half of contracts in yen, with the rest in dollars, has helped it hedge against currency fluctuations, Tsuji said. A policy of only leasing out vessels on contracts of 10 years has also allowed it avoid a slump in spot-market rates.
Anchor Ship, whose customers include Japanese shipping lines Nippon Yusen K.K. and Kawasaki Kisen Kaisha Ltd. (9107), plans to expand its dry-bulk fleet as China’s construction of bridges, roads and railways drives demand for iron ore, a key steelmaking ingredient. The country, the world’s biggest iron-ore buyer, increased imports of the commodity 8.1 percent in the first half of the year to 335 million tons, according to customs data tracked by Bloomberg.
That increase in demand has failed to prevent the Baltic Dry Index, a benchmark for commodity-shipping rates, plunging 36 percent in the past year, as Chinese shipyards work through a glut of new vessels ordered with government support. Anchor Ship intends to continue relying on longer-term deals to guard against market fluctuations, Tsuji said.
“We charter ships for 10 years and we’re not considering shortening that period,” he said. That way, the company only faces “market risk when the contract ends.”
‘Very Tough’ Yen
The stronger yen has hit Anchor Ship, which is trailing Tsuji’s target of making 10 percent annual returns over 10 years. The Japanese currency has jumped 11 percent in a year against the dollar as investors shun the greenback on concerns about U.S. debt. The yen reached 76.30 to the dollar on Aug. 1, just below the record 76.25 yen touched on March 17.
“It’s getting very tough with the yen around 75,” Tsuji said. “We’re getting close to our limit.”
Anchor Ship has 12 vessels in operation, comprising four container vessels, five tankers, a car carrier, one liquefied petroleum gas tanker and a bulk ship, Tsuji said. The company’s order backlog includes three container ships, two capsize dry- bulk vessels, three panamax and four handysize, he said.
The second fund has until December 2015 to complete its investments, according to Anchor Ship’s website.
The company’s first fund has posted annual returns of more than 5 percent since its formation in 2007 as signing more than half of contracts in yen, with the rest in dollars, has helped it hedge against currency fluctuations, Tsuji said. A policy of only leasing out vessels on contracts of 10 years has also allowed it avoid a slump in spot-market rates.
Anchor Ship, whose customers include Japanese shipping lines Nippon Yusen K.K. and Kawasaki Kisen Kaisha Ltd. (9107), plans to expand its dry-bulk fleet as China’s construction of bridges, roads and railways drives demand for iron ore, a key steelmaking ingredient. The country, the world’s biggest iron-ore buyer, increased imports of the commodity 8.1 percent in the first half of the year to 335 million tons, according to customs data tracked by Bloomberg.
That increase in demand has failed to prevent the Baltic Dry Index, a benchmark for commodity-shipping rates, plunging 36 percent in the past year, as Chinese shipyards work through a glut of new vessels ordered with government support. Anchor Ship intends to continue relying on longer-term deals to guard against market fluctuations, Tsuji said.
“We charter ships for 10 years and we’re not considering shortening that period,” he said. That way, the company only faces “market risk when the contract ends.”
‘Very Tough’ Yen
The stronger yen has hit Anchor Ship, which is trailing Tsuji’s target of making 10 percent annual returns over 10 years. The Japanese currency has jumped 11 percent in a year against the dollar as investors shun the greenback on concerns about U.S. debt. The yen reached 76.30 to the dollar on Aug. 1, just below the record 76.25 yen touched on March 17.
“It’s getting very tough with the yen around 75,” Tsuji said. “We’re getting close to our limit.”
Anchor Ship has 12 vessels in operation, comprising four container vessels, five tankers, a car carrier, one liquefied petroleum gas tanker and a bulk ship, Tsuji said. The company’s order backlog includes three container ships, two capsize dry- bulk vessels, three panamax and four handysize, he said.
The second fund has until December 2015 to complete its investments, according to Anchor Ship’s website.