Hong Kong-based VLCC owner Landbridge Holdings has one ship ready to fix on time charter in the midst of a historically strong market, and another on the way.
But the company does not intend to exploit the timing to extract top dollar by trading the vessels spot, pooling them or seeking short-term charters. Instead, Landbridge is in negotiations for a charter of “more than two years” for the first eligible ship with one of its long-term clients.
That ship, the 308,300-dwt Landbridge Prosperity (built 2016), is currently undergoing a scrubber retrofit at Zhoushan Shipyard. Another ship, the last in Landbridge's current series of newbuildings at Dalian Shipbuilding Industry Corp (DISC), is scheduled for delivery soon and remains unchartered.
“The money is not the only factor we consider in our commercial strategy,” Landbridge chief executive Vincent Lai King Yip said. “We like it when our charterers make money.”
After the announcement of US sanctions on the Cosco Dalian fleet in late September, spot rates for VLCCs spiked and one-year period rates leapt from the mid-$30,000s to $47,000 per day for several ships chartered by Trafigura and $50,000 per day for one vessel chartered by Koch Industries.
Spot rates have eased somewhat but Lai expects Landbridge's time-charter clients to get the lion's share of the upside as long as the market is at its peak. Landbridge is content with the spot-rate exposure it gets from the vessels it has in Navig8's VLCC pool and with the long-term earnings from its time-chartered ships.
He told TradeWinds that of Landbridge’s five ships now on the water and one soon to be delivered, two will remain in the pool — the 308,300-dwt Landbridge Fortune (built 2016) and 308,200-dwt Landbridge Majesty (built 2017).
Two more are on three-year time charters to Trafigura and BP at daily rates in the high $30,000s or low $40,000s, which is healthy long-term income, he said.
“With Trafigura, our group do not only do shipping but also oil business, and our chartering strategy is determined by Landbridge Group, not just the shipowning company,” Lai said.
Landbridge’s six ships are all lease financed through Norwegian, US and Chinese lessor owners.
Cut ties to Wah Kwong
Landbridge is the shipowning arm of the Rizhao-based Landbridge Group, China’s largest privately controlled port company, whose interests include Australia’s port of Darwin and an Atlantic-side terminal in Panama as well as large bulk and tanker terminals and a petrochemical refinery in Rizhao in Shandong province. It also has plans to develop a large LNG-import terminal there.
Company founder Ye Cheng did not own any ships until he started tanker outfit Landbridge Holdings three years ago. The Hong Kong management of Landbridge includes three former executives recently poached from Chao family-controlled Wah Kwong Maritime Transport Holdings.
Lai was chief financial officer at Wah Kwong before leaving to head Landbridge. Commercial director Ray Lei Yutian and Landbridge Shipmanagement managing director Sanjeev Verma held similar positions at Wah Kwong.
Technical management and newbuilding supervision of the Landbridge’s fleet was originally outsourced to Wah Kwong. But, under Verma, Landbridge has built its own technical team and taken all ships inhouse — a transition that was completed in May, Verma told TradeWinds.
