Japan’s private shipowners are increasingly turning to the secondhand sale-and-purchase market to reinvest their cash as it offers better value after yard prices reached a record high.

The country’s owners have traditionally been almost exclusively sellers, rather than buyers, of secondhand tonnage and usually prefer to focus their investments on newbuildings.

But soaring yard prices, and concerns over future environmental regulations, are increasingly encouraging them to look for better value in the secondhand market, where they are specialising in sale and charter-back lease deals.

As reported recently, Doun Kisen was involved as the buyer in a sale and charter deal with Asia Maritime Pacific, involving five bulk carriers.

It is one of a number of deals the Japanese owner has struck.

Over recent months, it has also been involved as a buyer in sale and bareboat charter-back deals for the 123,200-dwt shuttle vessel Torill Knutsen (built 2013) and the 98,000-cbm very large ethane carrier STL Nanhu (built 2022) from Eastern Pacific Shipping, according to VesselsValue.

In another typical deal, a trio of lesser-known regional Japanese owners — Kawana Kaiun, Shoei Marine and Sugahara Kisen — has agreed a sale and charter-back deal with Navios Maritime Partners for three capesizes back in September, VesselsValue reported.

The deal is essentially a refinancing with the charterer holding a purchase obligation after completion of the bareboart charters, which have been agreed for up to eight years.

An unnamed Japanese owner stepped in to buy and bareboat charter back two capesizes to Diana Shipping in August.

One local broker said Japanese owners are “very competitive” for this type of deal.

A major reason for turning away from newbuilding investments is that charter rates in the dry bulk market have plummeted, while newbuilding prices have remained firm because of inflationary cost pressures on yards.

“Newbuilding prices and charter rates just don’t correlate at the moment,” commented a Japanese broker.

According to broker Clarksons, three-year average panamax charter rates are currently $12,125 per day, compared to $15,111 per day in 2021.

In contrast, panamax newbuilding prices have remained firm at $35m, compared to $34.75m last year.

The increase in liquidity in the S&P market from Japanese owners comes as they are cash-rich and looking for ways to reinvest.

As earlier reported, almost all operators of Japanese-owned tonnage have been exercising attractively priced purchase options on the vessels.

In one recent example, d’Amico International Shipping took an option at $30.4m to buy the leased-in 50,000-dwt High Adventurer (built 2017) from Japan’s Doun Kisen.

That has left the Japanese owners with plenty of cash, which they have to reinvest into assets for tax purposes.