China Huarong Financial Leasing scored top dollar bids for a supramax bulk carrier it sold on the Zhejiang Shipping Exchange’s (ZSE) online auction platform Shipbid.
The strong buyer interest at the auction highlights the high demand for bulkers in a bull market that shows little sign of abating.
The 56,400-dwt bulk carrier Hua Rong 1 (built 2012) sold for for CNY 124.1m ($19.2m) when it went under the hammer last week, according to the Shipbid website.
The price represents a significant premium over the $14.6m value attached to it by VesselsValue, It's also higher the fair market range estimate of between $14.2m and $16.6m assigned by Maritime Strategies International (MSI).
The auction began with an opening bid of CNY 95.1m. But over the course of one and a half hours, the seven bidders that took part steadily pushed up the price with the ship eventually being sold to bidder 370, whose identity has yet to be disclosed.
Shipbroking sources suggested that the buyer is Chinese.
The Hua Rong1 last traded in the fleet of Zhejiang Changchang Shipping.
Earlier this year China Huarong sold two other supramax bulkers that were previously operated by Zhejiang Changchangfor premium prices via online auctions on the JSE platform.
In June the lessor sold the 52,700-dwt Hua Rong 5 (built 2005) to Hainan Aerospace Shun Shipping for $17.6m, well above the $11m VesselsValue said it was worth at the time. The ship currently trades as the Hong Tai Shun Hang.
This sale was followed up in August when the 56,400-dwt Hua Rong 2 (built 2013) was auctioned to Tangshan Dongfang Shipping for $18.6m, again a significant premium over the $12m it was said to be worth then.
Market observers said that recent decisions by Chinese lessors to sell tonnage is usually made in conjunction with the bareboat charterer as an asset play move and is not indicative of any distress or dispute between the two parties.
Imminent auctions
Chinese lessors and shipowners are said to be cashing in on booming bulker values to sell both existing tonnage and newbuildings.
Some have opted for the quick option of selling bulkers on the JSE’s platform, with Jiangsu Ocean Shipping’s 49,400-dwt Josco Suzhou (built 2004) scheduled to be auctioned on Tuesday with a minimum reserve price set at $8.7m.
Seacon Shipping Group of Hong Kong will attempt to sell its 56,800-dwt bulker Seacon 6 (built 2012) on the exchange on Wednesday. The minimum bid has been set at $14.8m, a figure well within MSI’s fair market value range estimate of between $14.2m and $16.6m for the ship.
A total of six bulkers have been sold on the JSE exchange since the beginning of the year.
The platform has also been used to sell tankers and containerships, with Yangzijiang Shipping’s 12,500-dwt multipurpose general cargo ship Yangze Venus (built 2013) set to be auctioned on 14 September.
Even if the ship is only sold at the minimum reserve price of $12.12m, the shipowner will still make a hefty profit on a ship it paid a mere $4.8m for in June 2019.
