Tokyo-based Nisshin Shipping is making a comeback in the MR tanker segment after exiting the business some seven years ago — splashing out up to $72m on a pair of 50,000-dwt product carrier newbuildings.
Shipbuilding sources familiar with the deal said Nisshin has contracted South Korea’s Hyundai Mipo Dockyard (HMD) to build the vessels, with delivery slated for the end of next year.
The company is said to have paid between $35m and $36m for each ship.
“These are conventional MR tankers,” said a shipping source familiar with Nisshin. “The contract was signed early this month.”
Denmark's Maersk Broker brokered the deal, sources said.
Officials at HMD were unavailable for comment as the shipyard is closed for the annual summer holiday. Nisshin did not respond to TradeWinds’ requests for comment.
Nisshin is said to have been attracted by the newbuilding price and stable charter market.
“The company has some plans for the two newbuildings. It did not order the tankers on speculation,” said the shipping source.
Trimming the fleet
Nisshin used to own as many as six MR tankers in early 2010. But it started trimming its fleet from 2012. It sold its last MR ship, the 46,000-dwt Seaeden (built 2007), to Oaktree Capital Management for $19.5m in May 2013, according to VesselsValue.
The Shin Kurushima-built tanker is now renamed as Torm Hardrada and is owned by Torm of Denmark.
A low-profile company, Nisshin is owned by businessman Y Fujii, who is in his 80s. VesselsValue lists the privately owned shipping company with 80 vessels on the water. The fleet is made up of 54 bulkers and 26 tankers.
Nisshin is believed to have more than 30 newbuildings on order at shipyards in Japan and China. Most of the newbuildings are ultramax bulk carriers that are being built at Nantong Xiangyu Shipbuilding & Offshore Engineering.
In July, Nisshin sold its only speculatively-ordered LNG carrier that was under construction at Samsung Heavy Industries to JP Morgan Asset Management at a loss of $31.3m. The ship was sold for $160m while it was contracted at $191.3m.
The sale of the LNG newbuilding has set many shipping watchers wondering if Nisshin is under financial strain.
Cutting costs
However, the shipping source familiar with the Japanese owner said the company is just “cutting down the losses on the ship as it had not lined up any employment and [the] LNG sector is an area that it is still unfamiliar with”.
“If Nisshin is running short of cash, it would not be ordering the two MR tankers at Hyundai Mipo,” said the shipping source.
Besides selling the LNG newbuilding, Nisshin has also sold three handysize and one panamax bulk carrier this year.
“Nisshin is an active player on the sale-and-purchase market,” said the shipping source. “It reviews its fleet constantly.”
Nisshin is said to be internationally minded and most of its ships are chartered out to non-Japanese operators.
Its client list has grown to include Cargill, Western Bulk and Ultra Bulk, while a series of 19,000-dwt chemical tankers on order at Usuki are heading for Ultranav and Nordic Tankers. Its key Japanese client is NYK Line.
