Private Chinese shipowners are hunting veteran secondhand MR2 product tankers as a lucrative backhaul trading opportunity develops around Zhoushan's Zhejiang Petrochemical refinery.
Sale-and-purchase brokers in China see the MR demand as a bright spot as secondhand bulker sales suffer from complications of the coronavirus epidemic.
Brokers in Shanghai said this week that the pool of actively interested Chinese MR2 buyers includes those that are well-known in domestic shipping circles, such as Shanghai-based Sanhan Shipping.
Also eyeing tonnage are shipowners in south-eastern coastal cities in Zhejiang and Fujian provinces. These include Mo Kangsheng’s Zhejiang Changhang Shipping and his brother Mo Weili’s Wenling Changfeng Shipping. Smaller local players are also among the MR2 shoppers.
"The reason is the completion of the new big refinery in Zhoushan," said a broker who has spoken to several buyers.
Worldwide delivery
"Local owners in cities in those provinces can get contracts of affreightment to bring methanol from the [Middle East] Gulf to local buyers. Then the ship can load directly at Zhoushan with cargoes of refined chemicals for delivery worldwide, and return home via the Gulf again."
The still unidentified buyer of Giuseppe Bottiglieri Shipping's MR2 fleet is thought to have bought the Italian quartet with this business in mind.
The 40,166-dwt Manuela Bottiglieri, Alessandra Bottiglieri, Ghetty Bottiglieri and Mariella Bottiglieri (all built 2002) were sold to Chinese interests for $28m per ship in January.
That transaction continued a series of sales starting last year to Chinese tanker owners that have now emerged as repeat buyers.
Brokers believe the November sales of the 46,700-dwt Panagia Lady (built 2004) for $11m and 48,300-dwt Susanne Victory (built 2000) for $8.9m both went to affiliates of Sanhan. They have been renamed Dragon Legend and Oceanus Sword.
Sanhan, which is also known as Jinhan, operates the MR2s under the name of affiliate Shanghai Xuanrun Shipping.
Another domestic owner interested in MR2s, Zhejiang Changhang, was last seen buying the 46,000-dwt Hafnia Atlantic (built 2004) in September before renaming it Win Sino.
The company also bought two MR2s the previous December.
But recent sales of more modern MR tonnage are unlikely to be connected to the Chinese buying wave.
"These owners are not going to use such young ladies to carry methanol from the Gulf," one broker said.
2016 kick off
Construction on the privately operated Zhejiang Petrochemical refinery project on Yushan Island started in 2016 with an announced project cost of over $25bn and support at the very top of the Communist Party of China.
The project was scheduled to begin trial operations this month, according to a Chinese government announcement of crude import licences for the project. A first phase of construction will use 20m tonnes of crude oil per year and produce 8.5m tonnes of gasoline, gasoil and jet fuel. It will also pump out 4m tonnes of paraxylene. Plans are to follow up with a second phase of similar scale.
