Splash247: Sinokor cashes out of boxes in $3bn pivot to VLCCs

A Korean shipping major’s decision to cash in its container chips and invest them in VLCCs is having major repercussions in the sale and purchase markets.

Brokers are agog at Sinokor’s market-altering decision to largely exit the container scene in favour of supertankers, paying over the odds for available VLCC tonnage. 

Oslo-based Gersemi Asset Management linked the move directly to a huge containership cash-out. “Sinokor is on a spending bender after cashing in on a rumoured $2.5-3bn sale of all their container vessels to MSC,” it said, pointing out that the Korean group is now effectively redeploying that capital into crude.

Gibson Shipbrokers, in its latest weekly report, described the Korean owner as “trying to buy as many VLCCs as it can get its hands on,” estimating that around 30 tankers may now have been tied up from the likes of Frontline, Dynacom, CMB Tech, Chandris, Capital, Advantage and Cardiff with further acquisitions to be revealed shortly. The London broker noted that most market players had been pegging 15-year-old VLCCs at around $59m to $60m during December, but Sinokor, keen to corner the market, has been paying 10-15% above these levels to commit sellers and lock down tonnage, in addition to a reported slew of time-charter extensions and new fixtures to major owners.  

Gibson said it expects some of the sellers to reinvest with new tonnage at yards in Asia.

Gersemi and other industry participants have significantly increased their generic valuation for oil tankers and VLCCs in particular, lifting NAVs and supporting share prices.