Hong Kong's Ocean Longevity is looking to use the bottom of the market as an opportunity to score newbuilding contracts to renew its fleet.
The bulker owner is struggling with a harsh market exacerbated by the effects of the coronavirus pandemic, but indicated this week that it is in a position to use the moment strategically.
The company has sold its oldest ship and acknowledged that it is on the lookout for replacements.
An official declined to identify the buyer of the 72,400-dwt Ocean Pride (built 1997) or the price, citing confidentiality clauses. The ship is to be delivered by early next month.
"This is a very difficult market for everyone, but it is a good time to take some ships," the official said. "We are in a stage of phasing out older ships and maybe contracting some newbuildings."
Ocean Longevity has about 30 ships from handysize to VLOC, counting the fleet of affiliated Ocean Line Holdings, plus a capesize still to be delivered from Japanese bank Nomura. It has been active in the newbuilding and secondhand markets.
Newbuilding opportunity
But at the moment, the company sees newbuildings as presenting the best opportunity, and kamsarmaxes appear to be the most likely candidate, based on its stated policy.
"Our strategy is to get rid of all our old ships and renew, and in a market like this, the reduction in newbuilding prices is much greater proportionally than the reduction in secondhand prices," the official said.
The oldest ships in the fleet are panamaxes, the 74,800-dwt Fortune Lady (built 1998) and the Ocean Pride. Both were set to go last summer as part of a three-ship sale to a Middle Eastern buyer, but in the end only one changed hands. The buyer of the third veteran ship eventually proved to be United Arab Emirates and India-based Seamec.
Ocean Longevity has taken delivery during the past year-and-a-half of panamaxes from Japanese yards and kamsarmaxes from China's Yangzijiang Shipbuilding.
Company officials are unable to visit yards because of coronavirus-related travel restrictions. All discussions are being conducted through brokers so far.
"Nothing is definite yet," the official said. "We're still talking. Maybe we will know next month."
Ocean Longevity is controlled by chairman Kwai Sze Hoi (Gui Sihai). In addition to its dry bulk fleet, it is a shareholder in Australia’s Brockman Mining, of which Kwai is also chairman. The fleet trades globally, with the larger vessels in part serving Kwai's mines.
