Capesize operating venture Shandong Shipping Asset Management Corp (SAMC) has started its long-planned fleet operations with a Peru-China voyage and plans for further acquisitions.
The three-way venture combines private Taiwanese company Eddie Steamship in the role of shipowner with two Chinese companies.
Chinese state-owned enterprise Shandong Shipping Corp serves as operator in the grouping.
The third player is Ocean Capital Shipping Corp, an investment vehicle with backing from Chinese bank-controlled leasing companies.
Players behind Ocean Capital are publicity shy but described their group as including "strategic investors and institutional investors who have marvellous maritime resources and experiences".
They described Ocean Capital as the capital channel for SAMC and indicated that more strategic investors are being recruited, with three unnamed financial institutions signed up for a strategic cooperation agreement and investors in the maritime industry also intending to participate.
TradeWinds reported last year that Eddie Steamship — a Hsu family company — would have a 20% share in the group. Shandong Shipping has 38% and Ocean Capital controls 42%.
Eddie Steamship principal Hsu Chih-chien (CC Hsu) this week confirmed those figures as current.
Putting the pieces together
"It took us almost two years to put all the pieces together," he told TradeWinds.
The control of ships under the venture is based on 100% registered ownership by an Eddie Steamship subsidiary, bareboat charters to the three-way venture and time charters to Shandong Shipping to serve its contract-of-affreightment (COA) customers and other clients.
SAMC closed in early June on one veteran capesize owned by Taiwanese state-controlled China Steel Express — the 175,800-dwt SAMC Eddie (ex-China Steel Excellence, built 2002).
Eddie Steamship purchased it for $8.8m and simultaneously bareboat-chartered it to SAMC, which then put it to work serving COAs for Shandong Shipping. The bareboat charter is for two years but renewable and includes a purchase option. The rate has not been disclosed.
Next up will probably be a CSBC Kaohsiung-built sistership — the 175,800-dwt China Steel Growth (built 2002). The price is still being negotiated against a background of volatile charter rates.
"After we took delivery on 2 June, the capesize bulk market went up every day for a month-and-a-half before it started down again, and it is still much better than in the early months of 2020," Hsu said.
SAMC plans to take more modern tonnage, including two newcastlemax newbuildings on order by Eddie Steamship. It is also open to acquisitions in other size brackets.
"The joint venture would certainly look at segments other than capesize but, for right now, we are mainly focused on iron ore imports to China," Hsu said.
