Chinese bulker owner and operator EGPN Bulk Carrier has made its debut in tankers, snapping up a secondhand VLCC and a chemical tanker.
Speaking to TradeWinds, director Zhang Yun confirmed the acquisition of the DSME-built, 305,700-dwt KHK Vision (built 2007) and the Japanese-built, 12,200-dwt Crane Argo (built 2010).
The VLCC was sold by Hong Kong's Tai Chong Cheang Steamship, while the chemical tanker was owned by Shikoku Kaiun of Japan.
Beijing-headquartered EGPN was launched in 2014 as a dry cargo operator but turned shipowner three years ago through secondhand bulker buys. But this is its first move in tankers.
Explaining the rationale behind the switch, Zhang said the tanker and bulker markets are at different stages of the market cycle, and while bulkers are booming — that could change — a rebound in the wet trade is imminent due to the recovery in oil consumption.
"The asset value of bulk carriers has more than doubled and if we are to buy them in this market, there may be risks," he said.
Zhang believes the current disruption to global supply chains, which is affecting the containership and bulker markets, could cascade to tankers.
"A lot of bulk carriers are facing disruption at loading and discharging ports. I think the same may happen to the tanker side," he said. "Given these two factors, I am quite sure that we are going to see a healthier tanker market."
Zhang did not disclose the purchase price of the VLCC and the chemical tanker but said his company would be taking delivery of the large crude carrier in early November. Clarksons' Shipping Intelligence Network shows the VLCC was sold for $31m.
As for the 12,200-dwt Crane Argo, the current market value of the 12-tank chemical unit is $7.93m, according to VesselsValue.
EGPN will be renaming the KHK Vision as Eastern Juniper and the Crane Argo as Eastern Iris.
Buying more tankers
Zhang said EGPN is currently bidding for two more secondhand chemical tankers but did not disclose details. EGPN is also looking to acquire MRs.
"The robust demand for energy is going to support the chemical tankers and even the dirty petroleum product carriers," said Zhang.
The company ordered its first newbuilding in April, contracting Chengxi Shipyard for one 82,000-dwt kamsarmax bulker to be delivered in August 2022.
It was reported to have paid about $29m for the vessel, which will be built to comply with Phase 2 of the International Maritime Organization's Energy Efficiency Design Index standards and Tier III NOx rules.
EGPN also bought two secondhand bulkers. It spent about $13.5m on the Chinese-built, 56,600-dwt Eastern Gardenia (ex-Superior, built 2012) and $15.25m on the Qingdao Beihai-built, 180,100-dwt Eastern Freesia (ex-Tiger Jiangsu, built 2010) from Greathorse International Shipping.
Zhang said the company has logged good earnings from its fleet and chartered vessels.
"Several capesize bulk carriers that we chartered are making good returns and so is our owned capesize ship Eastern Freesea," he said. "We have made good investments on the dry cargo sector, and now we have decided to invest on the wet trade."
"We will not put all our eggs in one basket ... we are seeking to diversify our investments."
Asked if EGPN will consider investing in containerships, Zhang said their asset value had risen too much and the ship-type is not a choice for his company.
EGPN's focus is on transporting grains, minerals and nickel ore into China. It currently operates nearly 30 vessels of which seven are owned ships.
Zhang said EGPN's bulker fleet will not be changing any time soon as it will not be buying or selling any ships.
Clients include commodity traders and mining companies such as Bunge, Rio Tinto, BHP and Fortescue Metals Group. It also provides shipping services to Hongyi International Trading, an affiliate that is involved in nickel ore. It transported around 2m tonnes of the commodity last year from Indonesia, New Caledonia and the Philippines into China.
Moving forward, EGPN is hoping to get into the ferry market by becoming a ropax operator in China’s Hainan Free Trade Zone.
