UK-based shipowner and operator Union Maritime is making its first capesize investment, picking up a Japanese-controlled ship and the last remaining vessel in a Turkish joint venture.
Market sources said the London-based company has bought the 175,600-dwt Cape Istanbul (built 2011) from Turkey’s Eregli Shipping for $19.1m.
TradeWinds is told that the same company is also behind a $20.3m deal for the 176,800-dwt King Ore (built 2010), a ship that had been controlled by Japan’s Nissen Kaiun.
These are the first capesizes in the fleet of the Laurent Cadji-led outfit, which has traditionally been a tanker player but has been expanding into other shipping sectors lately.
In March last year, TradeWinds reported that Union Maritime was entering the VLGC arena with an order for up to two LPG-fuelled gas carriers at South Korea's Hyundai Heavy Industries.
TradeWinds understands that Cadji has been monitoring the capesize market for an entry point as well, in the firm belief that demand for commodities will increase considerably.
Union Maritime currently has just three bulkers in its fleet of 54 ships. All three are ultramaxes built at Cosco Shipping Yangzhou and delivered as newbuildings in 2019 and 2020.
End of the road?
With regards to Eregli Shipping, the sale of the Cape Istanbul likely means that the joint venture has hit the buffers 16 years after its establishment.
Prominent Turkish shipowners including Akmar Shipping and Levent Karacelik set up Eregli Shipping in 2004. Their purpose was to jointly acquire a capesize to provide transportation services to Turkish producers of iron and steel.
In 2005 , the company signed a long-term agreement with Erdemir Lojistik — a move that saw it buy the 170,500-dwt Obeliks (built 2000).
Eregli shareholders, which include Akmar Shipping and Levent Karacelik, sold that vessel four years later to raise funds for the Cape Istanbul, which the company ordered in 2007 at Hanjin Heavy Industries.
Since its delivery in 2011, the Cape Istanbul was fixed to various charterers worldwide. However, the company never acquired any other ships.
Eregli managers and shareholders did not respond to a request to comment on the vessel’s sale or the future of the joint venture.
If Eregli shareholders decided to dissolve it, their sale may come at an opportune moment.
The ship’s reported sale price of $19.1m significantly exceeds the $17.7m that VesselsValue estimates it to be worth — especially as it is scheduled for special survey in May.
A willingness by buyers to pay such amounts likely results from general optimism about a revival of the capesize market, which has already caused freight rate indices to climb.
That optimism is reflected in estimates by research company Maritime Strategies International, which expects the Cape Istanbul to be worth between $18.7m and $22.1m on average during the first quarter.
MSI estimates the King Ore to be worth between $18.4m and $21.8m in the same period.
This article was amended since its original publication to reflect that Union Maritime, rather than Union Marine, is the buyer of the Cape Istanbul.
