Amid lacklustre interest from alternative buyers that remain uncertain of the market outlook, Greece’s Vafias clan acquired their fourth capesize bulk carrier since early November.
According to several brokers and ship management sources in Athens, a company on the family’s private side is the buyer of the Japanese-held 181,500-dwt capesize Lowlands Sunrise (built 2011).
Greek sources say that the Koyo Dockyard-built ship changed hands for about $24.5m, which is below the price indications provided by brokers in the US and London.
This brings the Nikolas Vafias-led family’s outlay on capesizes over the past six weeks to about $100m, according to TradeWinds’ calculations.
Underpinning these acquisitions is the expectation that subdued economic activity in China, whose iron imports are the mainstay of the capesize trade, will eventually rebound.
There is evidence to suggest that Vafias’ bet could go well.
Popular unrest and plummeting trade figures have recently forced the Chinese government to loosen its strict zero-Covid policy, which may revive the economy — especially if the Communist Party announces stimulus measures as well.
Some observers, however, remain wary, on concerns that looser Covid rules could increase China’s death toll and weaken economic activity — at least in the short term.
The modest price fetched by the Lowlands Sunrise, a capesize with a large design that offers commercial advantages, confirms the downward trend in the value of such assets and suggests that sceptics outnumber optimists for the moment.
The sellers’ reluctance to reduce prices further from the levels they have already fallen to is another reason for the poor secondhand activity, brokers point out.
“There are candidates in the market that are more realistically priced than others … otherwise, [sellers'] price ideas remain out of touch and their ships out of reach,” Athens-based Doric Shipbrokers said in a report on 16 December, adding that several bulkers are circling the market or are shelved.
As for Vafias, sources tell TradeWinds that he deems that prices for high-quality capesizes have sunk to a sufficiently low level to start betting on a Chinese recovery.
Weak S&P activity
Others may be joining the bet.
Several brokers reported on 16 December that an unidentified European buyer is spending between $23.9m and $24.6m apiece on the South Korean-built 180,200-dwt sisterships Wisdom of the Sea 1 and Wisdom of the Sea 2 (both built 2011) — the only vessels South Korean construction firm IS Dongseo is currently listed with.
Another player who started buying capesizes earlier in the year is Turkey’s Beks Shipmanagement, which acquired three such vessels in recent months, though older than the ones Vafias bought.
As TradeWinds reported on Friday, these include Chartworld Shipping’s 180,300-dwt Star Energy (renamed Beks Ice, built 2004) and Orient Lines’ 176,900-dwt Orient Angel (renamed Beks Angel, built 2007).
The latest capesize acquired by the serial Turkish buyer at an undisclosed price is DryLog's 176,300-dwt Bulk China (built 2005).
By investing in capesizes, Vafias is revisiting familiar ground. Capesizes had been among the first shipping segments the Greek owner entered in the late 1980s.
Before switching its attention to capesizes, Brave was busy buying handysizes. between February 2021 and April 2022, the company acquired six such vessels — all Japanese-built — on the secondhand market or at auctions.
The six handysizes and four capesizes Vafias bought are just a small part of a general expansion drive that saw the Greek group expanding its footprint in other sectors as well, with 24 newbuildings and secondhand acquisitions over the past 18 months.
LPG gas carriers
One of them is the 40,000-cbm Eco Merlin (built 2022), which Vafias has just taken delivery of from Hyundai Mipo Dockyard.
This is the first in a series of five midsize LPG gas carriers that private Vafias interests have ordered at the South Korean yard. Market rumours in Athens suggest that the Eco Merlin was chartered by a European energy player for a year at a juicy monthly rate of $930,000.
At the same time, the Greek shipping group doesn’t neglect to benefit from soaring tanker values to offload some of its older vessels at an advantageous price.
In the latest such deal, already reported by TradeWinds on Friday, private Vafias interests sold the 50,500-dwt T Rex (built 2006) to Beks for between $19m and $19.2m.
