The frantic pace in Chinese secondhand bulker buying of late has raised eyebrows in the market.
“I’m really at a loss why they’re buying so much,” a baffled Greek shipowner told TradeWinds after agreeing to offload his third ageing bulker to a Chinese buyer this year.
Year-on-year comparisons look impressive. According to Allied Quantum figures, Chinese interests have bought 195 bulkers so far this year, accounting for 24% of total deals.
That is a steep increase from 2023, when Chinese interests purchased just 77 bulkers, accounting for just 11% of the total.
This buying thirst has allowed 35 different Greek shipping companies to offload 51 bulkers to Chinese interests in confirmed deals compiled by TradeWinds between 1 January and 22 October worth close to $800m.
The average age of these ships was 18 years.
Star Bulk Carriers alone, the Petros Pappas-led US-listed shipping giant, has sold at least five bulkers to Chinese interests this year and another seven in 2023.
Ageing capesizes are particularly coveted.
According to researchers at Athens-based Allied Quantum Sea, Chinese interests were on the buying side nearly every time an identifiable buyer acquired a capesize vessel older than 15 years, researchers at Athens-based Allied Quantum Sea told a Marine Money conference on 15 October.
For Eva Tzima, however, the head of research at Athens-based Seaborne Shipbrokers, this year’s buying does not represent a peak but merely a return to normal following a lull during the Covid pandemic.
“The Chinese are compensating now for the step-back they had taken over the past years,” Tzima told TradeWinds.
“After all, China had always been a typical destination for about one-quarter of ageing bulkers,” she added.
Data supports this trend. In 2021, Chinese buyers were equally active, acquiring 229 bulkers in the secondhand market, which accounted for 25% of the total, according to Allied figures.
Chinese buyers — always the dominant buyers of older bulker tonnage — began flexing their muscles after economic activity rebounded following the end of lockdowns in January 2023.
Acquisitions then accelerated in 2024 amid dropping secondhand values.
“Chinese buyers are very price sensitive, so they’re taking full advantage of the current market dip as their economy and demand for commodities is improving,” said Tzima.
The whole process is underpinned by active support from Chinese leasing houses keen to employ spare capital, according to the analyst.
“They have become very competitive on the rates they offer and are now extending finance even for ships older than 15 years — not just to local shipowners but to foreigners as well,” said Tzima, who visited the country recently.
Decentralised buying
This contradicts popular interpretations attributing geopolitical motives to the Chinese buying spree.
Several market watchers suspect that China is acquiring bulkers to replenish its stock of iron ore and other commodities in anticipation of potential armed conflict with Taiwan and an escalating sanctions war with the US.
Such theories are not far-fetched. Chinese officials have openly stressed the importance of an owned fleet to enhance their country’s independence and trade policy clout.
Current and possible future trade restrictions certainly weigh heavily on the minds of Chinese owners who will think that it makes sense to directly control as much tonnage as possible.
However, the pattern of Chinese bulker purchases does not suggest a large-scale, centrally coordinated fleet acquisition strategy.
Acquisitions are spread among a diverse range of independent players, each acting at different times and guided by their own business rationale.
Frequent buyers, such as Zhangjiagang Ocean Oceanicwit and Winning Shipping, have been focusing on capesizes.
Others like Fujian Highton Development and Glorious Youth Shipping have been piling up smaller bulker types, such as panamaxes and supramaxes.
This does not resemble the indiscriminate, centralised purchasing observed during the initial formation of Russia’s shadow fleet by companies such as Gatik Shipmanagement.
China’s demand for bulkers arguably reflects genuine economic needs, particularly in light of the recent economic stimulus package adopted by Beijing.
Some see the buying of capesizes as driven by major Chinese investment in places like the Simandou iron ore mine in West Africa.
Allied analyst Matthew Harrington said: “Chinese owners want to control the entire chain, from production all the way through to getting those quantities back.”
Steel exports are also ideally suited to Chinese supramaxes, according to the researcher.
China’s seaborne iron ore and coal imports are forecast to soar to a fresh record this year.
