An Alpha Bulkers Shipmanagement capesize is under arrest by a Chinese buyer who believes he was unfairly treated in a scuttled ship sale.
The dispute is a side effect of China's de facto ban on Australian coal imports.
TradeWinds understands that the arrest at the weekend came as an unexpected reversal for Alpha Bulkers after the 170,400-dwt Alpha Era (built 2000) had waited at anchor for six months to be permitted to discharge.
The ship arrived at the Chinese port of Fangcheng on 29 May this year carrying more than 135,000 tonnes of Australian coal, only to become an early victim of the country's undeclared trade action against Australia.
TradeWinds recently reported that Alpha Bulkers was one of several shipowners to file lawsuits against Chinese charterers for unpaid hire during the protracted and uncertain idle period.
Chinese industry sources told TradeWinds that the ship was permitted to discharge on 28 November but was immediately arrested after completion of cargo operations. AIS data shows that it has now returned to the Fangcheng outer anchorage.
No official information on the arrest is currently available from the Fangcheng branch of the Beihai Maritime Court, which issued the arrest order.
"Alpha Bulkers considers the arrest imposed as wrongful and without merit," Alpha Bulkers legal counsel Theodore Mitrakos said in response to a TradeWinds request for comment. "Owners will deal with it appropriately."
Business model
Chinese industry sources identified the arresting party as a Chinese company that specialises in elderly capesize tonnage called Hong Kong King Shan Group, owned by Jin Jingbiao.
Fuzhou-based Jin was an established player in coastwise trades before entering the capesize business about 10 years ago. Currently he is believed to control two elderly capesizes, the 172,500-dwt Koryu 8 (built 2000) and 177,000-dwt Phoenix 8 (built 2004). He also controls Zhejiang Jinlong Shipping.
In June, TradeWinds reported that Alpha Bulkers had sold the Alpha Era to an unknown Chinese buyer for $7.8m. Brokers reported that Fujian Ocean Shipping had bought the vessel, but they had apparently confused one of Fuzhou's many active private sale-and-purchase players with the state-controlled company.
Like many of his fellow shipowners in Fuzhou, Jin's business model is to use all-equity financing to acquire old ships near their scrapping date and operate them intensively while keeping a close eye on fluctuations in the scrap market.
During Jin's six-month wait for the Alpha Era to discharge and be delivered, the scrap value of the ship committed for sale rose to near the $10m mark. VesselsValue currently puts its scrap value at $9.43m.
Sources close to the deal told TradeWinds that Jin recently learned that the seller had requested a quote for the ship from a well-known cash buyer. Then he received notification through brokers that the seller was cancelling the deal and would refund Jin's deposit.
Even then, Jin is understood to have been reluctant to go to the length of arresting the ship, but was offended when the Greek shipowner did not respond to his communications.
"But they kept calling Mr Jin as soon as the ship was arrested," the source added.
Alpha Bulkers is in fleet renewal. It has two 2000-built capesizes committed for sale to buyers listed by VesselsValue as "unknown Chinese" and one purchase awaiting delivery, the 180,600-dwt Tilda Oldendorff (built 2011).
