Taiwanese shipowner Chi-Chien Hsu (CC Hsu) has resumed a string of secondhand capesize buys that started in 2020, taking advantage of a dip in the capesize chartering market and in secondhand sentiment.
The purchase of the 203,500-dwt newcastlemax China Steel Realist (built 2007) from Taiwanese compatriot China Steel Express brings the capesize fleet of Hsu's Eddie Steamship to five.
But it is uncertain whether his lastest purchase will be put to the same commercial use as the other ships, which have all so far gone to a Chinese-Taiwanese venture in which Eddie is a shareholder.
Other than one acquired from a Japanese private shipowner, Eddie has acquired all its capesizes from Taiwanese compatriot China Steel Express, a state-owned industrial shipping company that regularly sheds old tonnage built at compatriot yard CSBC Kaohsiung.
All have gone on long-term bareboat or time charter to capesize venture Shandong Asset Management Corp (Samc), where Taiwanese partner Eddie serves as the main tonnage provider and mainland partner Shandong Shipping Corp provides the work through its book of contracts of affreightment.
But a source familiar with Eddie's fleet plans said the China Steel Realist, to be delivered in late December or January, remains uncommitted to Samc so far.
One of Samc's operated fleet, the 206,200-dwt Samc Mg (built 2006), is chartered from affiliates of Minsheng Financial Leasing, the rest from Eddie.
Samc's other capesizes were acquired in 2020 at an average reported price of about $11m, less than half that of China Steel Realist.
Brokers have reported a wide range of prices for the China Steel Realist but sources familiar with the deal told TradeWinds the ship went for $23m, on terms concluded in the first half of November after capesize rates took a dive.
Hsu declined to comment on the reported purchase, citing confidentiality clauses.
Trends in newcastlemax prices are hard to be sure about because the universe of sellers and potential buyers is a small one, with few exactly comparable deals to govern sentiment.
But $23m would represent a substantial bargain based on the last done easily comparable sale, that of the Japanese-built 207,800-dwt Baogang Glory (built 2008). In October, before capesize rates stumbled, an unknown Chinese buyer agreed to buy the Baogang Glory for a full $31.5m, like the China Steel Realist without a ballast water treatment system (BWTS) and with a drydocking coming up. The China Steel Realist needs a special survey drydocking in April while the Baogang Glory needed only an intermediate survey.
One market source believes the Baogang Glory deal was done on the basis of instalment payments by the unknown Chinese buyer, a factor that could inflate the price.
Shipping data service VesselsValue estimates its current market price at $29.1m, up from $15.2m a year ago.
MSI Horizon, however, estimates a fair market value of $27.4m for the fourth quarter of this year but expects values to keep falling, to $21m in the first quarter of 2022 and to $20.5m in the second quarter of next year.
China Steel Express, which owns 18 newcastlemaxes plus five handysize bulkers and two multi-purpose ships, did not immediately respond to a request for comment.
