A flurry of sale-and-purchase activity in the small boxship sector is being fuelled by the largest provider of handysize tonnage.
Germany's Leonhardt & Blumberg Shipmanagement (L&B) has bought and sold a total of nine feeder containerships in recent weeks.
It is estimated to have paid out around $22m to acquire four 1,700-teu vessels and has also sold a handful of smaller ice-class feeder vessels.
The moves keep the Hamburg-based company at the top of the list of handysize tonnage providers, with a fleet of approximately 40 containerships.
The German company is at the fore of a number of recent deals, which suggests the small boxship sector is starting to mirror the more active market for larger ships.
Other sales include a pair of eco-boxships managed by Reederei Nord on behalf of US-based merchant bank AMA Capital Partners.
The 1,756-teu Nordemilia and Nordclaire (both built 2016) are said to have been committed on subjects to Chinese interests at about $33.8m en bloc.
Brokers said the ships have been up for sale for a while, but added that the improving market made it possible for the US firm to exit "without losing too much money".
Three more sisterships in the series remain on the sales market.
Liner operators are also involved in the market, with Mediterranean Shipping Co (MSC) named as the buyer of the 1,730-teu Amanda D (built 2000) from German owner Peter Dohle.
Good timing
L&B managing director Torben Kolln said his company's move into the S&P market is timed to take advantage of the recovery of charter rates and asset values for smaller ships.
It is already the largest tonnage provider of 1,700-teu vessels, with 28 such ships in its fleet.
But that will grow to 30 with the addition of two vessels acquired from Samudera Shipping of Indonesia for $6.8m each.
The 1,740-teu Sinar Sabang and Sinar Sumba (both built 2008) are understood to have been financed by Sweden's SEB Bank.
They will join the earlier purchases of the 1,706-teu King Crimson (built 2007) and Moonchild (built 2008), which now operate in the L&B fleet as the Hansa Colombo and Hansa Lanka.
The latter two vessels were quietly acquired from German banks and US funds in August for little more than $4.1m each.
Jump in charter rates
L&B is understood to have acquired some ships from the banks from within its own portfolio, following its merger with Buss Group in 2017.
But its recent interest in acquiring vessels from third parties came ahead of a 25% jump in charter rates in the past month.
Six and 12-month charter rates for standard geared 1,700-teu ships have risen from about $9,000 per day to $12,000 per day in the past month.
Kolln said the company does not need such high rates to be profitable.
He credited his company's involvement in its commercial manager Hanseatic Unity Chartering with providing the early warning that charter rates were ready to increase in the spot market.
"And for us it was logical that the values will follow — that's why we [have] become active in last few months," he said.
Cash-strapped buyers
Brokers said that values have increased less for smaller handysize ships than for larger vessels.
That is due to a limited number of buyers in the sector with less capital.
But that could change if rates continue to increase as they are doing for modern designs.
The charter of the 1,700-teu Mount Gough (built 2016) was extended in Asia with Hong Kong-based liner operator Orient Overseas Container Line for nine months at $15,750 per day.
That bodes well for other Bangkokmax designs such as the 1,762-teu Induro (built 2020), the sixth in a series of vessels originally ordered by Lomar Shipping that was delivered in November to Japanese Kotoku Kaiun.
L&B is veering away from newbuildings due to concerns over the higher cost and uncertainty over fuel propulsion, Kolln said.
It has focused instead on selling its smaller ice-class feeder vessels.
Recent sales from L&B include the 889-teu Carat (built 2010) and Ceres (built 2009).
These are reported sold for $8.3m en bloc to Finnish owner Langh Ship.
L&B has also sold the 1,025-teu Philemon (built 2010) to Dutch shipowner Ara Group, having sold two similar vessels earlier in the year to German owner Elbdeich Reederei.
The 1,025-teu Pollux (built 2009) reportedly fetched $5.2m and the 1,025-teu Priamos (built 2011) sold for an undisclosed price.
